Epicor announced a new round of cost-reduction steps today, including headcount reduction, cutbacks in discretionary spending, and efficiency improvements. It said that expects to save somewhere between $16-20 million, with restructuring charges eating up $4 million of the savings during the fourth quarter.
Although Epicor did not note the number of employees affected, an Epicor employee in the firm's Newburgh, NY office informs me that the layoffs hit 10% of Epicor's headcount worldwide. Unfortunately, he was one of them.
The cost-cutting actions come at a key time for Epicor. As with all tech companies, the firm faces cutbacks in IT spending
due to economic conditions. But Epicor is also battling a hostile takeover bid by New York hedge fund Elliott Associates. Epicor's board voted last week, for the second time, to reject Elliott's offer. Elliott already owns 10.2% of Epicor and is gunning for the whole thing. It originally bid $9.50 per share back in October, but last week lowered its offer to $7.50.
Cost-cutting will just take Epicor so far in improving the bottom line. If it wants to remain independent, it will need to improve the top line as well. But under current economic conditions--and intense competition from other players--it won't be easy.Postscript:
I am convinced there is a fresh round of layoffs at Oracle as well. The Spectator's web log is suddenly getting hammered this week by Google searches for the words, "Oracle layoffs." The only difference with Oracle is that they are not saying anything. If you have more information, leave a comment or send me an email. Related postsEpicor facing unfriendly takeover bidMore layoffs at EpicorEpicor in transition: revenue up, profits downMore on Epicor's management changesLayoffs coming at Epicor?