Corel, the Ottawa-based software maker, has announced it will cut its global workforce by nine per cent following losses reported by US venture-capital firm Vector Capital Corp, which is in the process of buying the company..
Corel will trim approximately 60 positions, reducing payroll costs by an estimated US$4.2 million per year, despite the company's minor increase in second quarter sales. Q2 revenue, ending May 31, was reported at $32.2 million, up from $30.8 million in Q2 2002.
According to Derek Burney, president and CEO of Corel, the staffing adjustments will be made in order to keep the company's costs in line with expected revenues.
The most significant gains came from Corel's XML solutions division, which grew by 46.6 per cent to $456,000 along with its office productivity offerings, which increased by 33 per cent to $15 million. Corel's process management solutions, however, took a hit decreasing by 11.2 per cent from $2.5 million in Q2 2002 to $2.2 million Q2 2003.
In addition, the company's European, Middle East and African markets saw a 23.2 per cent revenue drop, while Corel North American revenue saw a steady growth of 25.7 per cent in Q2.
On June 6, Corel and Vector Capital announced that they
had signed a definitive acquisition agreement for the proposed purchase of Corel by Vector Capital. The proposed acquisition is, however, subject to shareholder and court approval. Until such time as these approvals
are secured, Corel remains a separate entity and is not part of Vector Capital.