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Corel cuts staff to reduce costs

Canadian software company Corel is cutting 66 staff to reflect its expected revenue performance.

For the second quarter of 2003, Corel reported a net loss of $5.6m (£3.4m) on revenue of $32.2m. That compares with a net loss of $574,000 on revenue of $28.3m in the first quarter of the year, Corel said.

Corel launched four products during the quarter - WordPerfect Office 11, Corel Designer 10, Corel Painter 8 and Corel Smart Graphics Studio - and said the launch of the office suite had caused a slight increase in revenue.

However, Corel admittted revenue growth is a challenge as it tries to move from older graphics products to XML content management products.

Corel said revenue from graphics solutions fell 5.6% to $14m (£8.5m), while revenue from office productivity products rose 33% to $15m. Office productivity revenue jumped 66.6%, reflecting the launch of the Office suite.

XML product revenue grew 46.6% compared with the same quater a year ago to $456,000 (£276,000), but dropped 60% from the previous quarter, when it hit $1.1m (£667,000).

The cuts to Corel's workforce will reduce payroll costs by about $4.2m (2.5m) per year, the company said.

Corel announced earlier this month that it had agreed to be acquired by Vector Capital for $97.5m (£59m).

Gillian Law writes for IDG News Service


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