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Manugistics Plans Layoffs as Losses Mount

Rockville Firm Says Weak Software Sales Prompt Cut of More Than 90 Jobs

By Ellen McCarthy
Washington Post Staff Writer
Friday, September 24, 2004; Page E05

Manugistics Group Inc., facing falling revenue and losses that more than doubled in its second quarter, said yesterday it will lay off more than 90 employees by the end of January.

The Rockville maker of business software said it will be down to 725 employees within six months, with layoffs concentrated in sales, marketing and development.

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Manugistics executives said decreased corporate spending and long sales cycles contributed to a loss of $17.1 million (21 cents a share) in the second quarter ended Aug. 31, compared with an $8 million (11 cents) loss in the comparable period last year. Revenue fell to $51.3 million, from $59.7 million.

"The market for enterprise software solutions has not recovered as suspected and remains very challenging," said chief executive Joseph L. Cowan. Cowan said Manugistics will focus more on providing consulting services to help retailers, suppliers and government agencies manage their supply chains. Software sales for the second quarter dropped to $11.1 million from $17.8 million while services revenue grew slightly, to $21.3 million from $21.1 million.

In August the company fired its president, Jeremy P. Coote, who had been with the company for just over a year.

The new layoffs follow cuts that reduced the company's workforce from 865 in late May to 815 by the end of August. Those layoffs contributed to a $6.2 million restructuring charge, including $2 million in severance payments and $4.2 million in other charges.

Shares of the company's stock, which traded for more than $9 in January, closed at $2.59 yesterday, down 2 cents.

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