Siebel Systems has turned in quarterly revenue of $333.3m - an 18% drop from $405.6m for the same quarter the previous year - and warned that further job cuts were likely.
Siebel's net income also declined, dropping 67% year on year from $29.8m to $9.8m.
Software licence revenue slid 35% to $109.9m, but its professional services and maintenance revenue fell 5% to $223.4m.
In a move to lower operating costs, Siebel will cut 490 jobs, consolidate some facilities and eliminate others, and shift some jobs overseas. It hopes to achieve up to $40m in quarterly savings by mid-2004.
"It just does not appear that the IT economy is picking up and, as a result, we've made a decision to rework our operating plan," said chairman and chief executive officer Tom Siebel.
Siebel's headcount has dwindled steadily. It expects to end the current quarter with 5,000 employees, down from more than 8,300 at the start of 2001.So far 900 positions have already gone. Siebel has also accelerated efforts, begun in the second half of last year, to save money by outsourcing to cheaper labour markets positions in several software design and testing fields.
Siebel admitted Oracle's hostile bid to take over PeopleSoft contributed to the depressed buying climate.
"I don't think it was good news for anyone," he said. "I can think of a number of specific transactions ... that did get pushed out as a result of this ongoing dialogue."
Stacy Cowley writes for IDG News Service