CA Mulls Cutting Nearly a Thousand JobsBy Paula Musich | Posted 07-27-2006
CA's financial problems continue to dog the software behemoth's attempts to move its business forward.
The latest in a string of bad news is that the Islandia, N.Y., company is considering a layoff of between 800 to 1000 employees in August, according to sources close to CA.
While the restructuring plans are still in flux, according to sources, such a layoff would represent 5 or 6 percent of CA's work force.
The company in late June told Wall Street analysts that it found new stock options problems as well as the understatement of some $40 million in revenue.
Those problems could require that CA restate hundreds of millions of dollars in past financial results.
As Wall Street awaits CA's delayed 10K filing for fiscal 2006, expected now to be released by July 31, analysts are unsure of what to expect.
"They have surprised us quite a bit over the last three to six months," said Gregg Moskowitz, senior research analyst at Susquehanna Financial Group in New York.
"A lot of top lieutenants are not there; they are working through things like the ERP implementation and the sales compensation issue is at the top of list. I didn't expect this extent [of problems]."
CA's list of recent problems include missing a June 29 deadline for filing the fiscal 2006 10K, the reorganization of its sales force and the departure of its top sales executive Greg Corgan.
There was also the departure "by mutual agreement" of Chief Financial Officer Bob Davis and the departure of Chief Operations Officer Jeff Clarke last spring.
Those come on top of a misstep in CA's sales force compensation program in which some employees received double commissions.
CA has since replaced Clarke with Michael Christensen, and it named its corporate controller Robert Cirabisi as interim CFO.
Although sources did not know where the cuts would come from, Susquehanna's Moskowitz has some ideas.
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