Baltimore's restructure plans criticised

IT users could be deluged with offers of unnecessary security products and services as security vendors try to repair battered...

IT users could be deluged with offers of unnecessary security products and services as security vendors try to repair battered balance sheets.

The warning came as Baltimore Technologies joined the list of suppliers reporting poor results and job losses.

Baltimore today said it would cut another 220 jobs, following the 250 lost in May, after announcing second quarter pre-tax losses before one-off costs of £23.7m.

The restructuring is designed to enable the company to focus on providing e-business security and trust systems.

Paul Sanders, the chief financial officer and acting CEO of Baltimore Technologies, said: "There is little doubt that this has been a difficult period for the group. Clearly these results are not acceptable and do not reflect the company's true potential. The measures we have announced today will firmly address this situation."

Lars Davies, an IT security consultant and Internet law professor at Queen Mary and Westfield College at the University of London, said users should be sceptical about the whole sector.

"Users are already awash with worthless products as firms scramble to improve profits and a lot of products are being brought to the market before they are ready.

"I would advise users to be calm and think about what the technology on offer can do for them and, crucially, if it can deliver. Companies such as Baltimore have promised their users the earth and delivered little."

Mark Blowers, a senior research analyst for Butler Group, added: "The main concern for users now is whether Baltimore will continue developing their products and supporting them."

Entrust Technologies, a Baltimore rival, was eager to distance itself from the negative comment.

Entrust co-founder Brian O'Higgins pointed to the biggest contract win in its history - a C$17m (£7.6m) deal to help the Canadian government put its services online - as proof of its strong position.

He explained: "If one company is in trouble, it does not mean we all are. We restructured early for the downturn and put our cost structure in line with market reality. We stopped providing services and now rely on partners to do this and we are concentrating on the areas of government, finance and healthcare. There is no question that we are very well-positioned now."

Clive Longbottom, an analyst at Quocirca, was sceptical. "Entrust and Baltimore are struggling with PKI systems because they are a dog to market," he told CW360. "Entrust have the same problems as Baltimore and Wall Street does not like either of them. Entrust can put forward a good story but the bottom line is that the market perception is bad."

Read more on IT jobs and recruitment