Ireland to escape CA job cuts


30 Sep 2004

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Irish employees are unlikely to be affected by a major restructuring at software giant Computer Associates (CA) that will see 800 jobs – or 5pc of its global workforce – being cut, a company spokesperson has said.

The programme, which is expected to cost US$40m to implement, will focus mainly on the marketing and development areas. “The major areas that CA is looking to take jobs out of are not in Ireland,” the spokesperson told siliconrepublic.com.

CA employs 28 people at its Irish headquarters in Ballsbridge.

The job cuts are expected to yield US$70m in cost savings annually, the company said. It added that the impact on its salesforce would be “minimal” and that the majority of the job cuts would be completed by the end of October. Of the US$40m restructuring charge, approximately US$25m will be incurred in the second quarter of fiscal 2005, with the remainder to be spent by the end of the fiscal year.

“Over the past few months, we have been evaluating the overall business, the skills necessary to meet our company goals and the expenditures required to meet our growth objectives,” commented CA’s chief operating officer Jeff Clarke. “CA is financially strong but we must make these changes to grow sales, increase profitability and remain competitive. The result will be a simpler, more efficient company and one positioned for growth.”

Meanwhile, former CA chief executive Sanjay Kumar has pleaded not guilty to charges of fraud and obstruction of justice linked to an investigation of improper accounting at the embattled software maker.

Announcing the charges last week, federal prosecutor James B Comey said the defendants are: “accused of perpetrating a massive accounting fraud that cost public investors hundreds of millions of dollars when it collapsed.” The defendants “allegedly tried to cover up their crimes by lying,” he said.

CA has also agreed to pay US$225m to compensate victims of the fraud, the Department of Justice (DOJ) announced. If CA complies with the terms of the agreement for 18 months, the US Attorney’s Office has agreed not to prosecute CA. But that deal doesn’t protect any individuals from prosecution, the DOJ said in a statement.

By Brian Skelly

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