Telecom Lead India: Progress Software is planning to
cut its global workforce by approximately 10 to15 percent.
As part of overall restructuring, Progress will reduce
annual run-rate costs by $55 million gross, expected to be net $40 million
after additional investments, by the end of FY 2012.
The company expects to complete most of these workforce
reductions during its second and third fiscal quarters of 2012, depending upon
local legal requirements.
Progress will also sell ten non-core product lines
including Actional, Artix, DataXtend, FuseSource, ObjectStore, Orbacus, Orbix,
Savvion, Shadow and Sonic. These product lines do not fit into the company’s
core portfolio. Fiscal 2011 revenue for these products totaled $172 million.
As per the new strategic plan, Progress will focus on
enhancing growth, profitability and shareholder value.
Progress, which is keen to become a strong player in
next-generation, context-aware application development and deployment platform
in the Cloud for the Application Platform-as-a-Service (aPaaS) market, will
invest in core OpenEdge, DataDirect Connect and Apama Analytics and Decisions
The new strategic plan is the result of a five-month
comprehensive evaluation of the Company’s product portfolio, business model,
capital allocation strategy, customer base and future opportunities. The
evaluation was led by Progress’, “Progress pioneered the creation of application
development and deployment infrastructure tools, technology and software. Our
new strategic plan is firmly rooted in this foundation and is designed to
significantly improve Progress’ growth and performance. With our refined focus
on providing advanced, leading-edge application development products and
services to customers, we are confident that we will enhance value for all shareholders,”
said Progress Software President and Chief Executive Officer Jay Bhatt.
For its core products, the Company expects to achieve a
revenue growth rate of 5 percent in FY 2013 and 7 percent+ in FY 2014 and
beyond and approximately 35 percent operating margins by FY 2013.