Acxiom Corp. said that revenue and earnings for the first quarter will be below its previously stated expectations. The company plans significant cost reductions efforts including a 7% reduction in its workforce.
The actions include laying off 400 employees, further pay cuts for many of its leaders as well as reductions in computer expenses, building costs, consulting and outside services and other items, company leader Charles Morgan said in a statement.
The Little Rock, AR-based company said it does not expect substantial improvement during this fiscal year. The first quarter ends June 30.
The company said it expects that first quarter revenue will be approximately $205 million, resulting in an operating loss of $3 million to $6 million. The company also expects to take primarily non-cash write-offs in the range of up to $80 million to $90 million attributable to a restructuring of operations. It is anticipated that the cash portion of this write-off will be approximately $9 million.
“Acxiom’s business performance continues to be significantly impacted by the severe economic downturn,” Morgan said in a statement. “Although our customer base represents some of the leading companies in the world, these same companies are aggressively managing their costs and deferring projects and large purchases.
“For the past five years, we have been migrating from mainframes to servers and more recently to AbiliTec-driven processes at Acxiom,” he continued. “Due to the economic situation, we are now accelerating our focus on the new technologies we have developed, and in this economic climate we can no longer carry the burden of both the old and the new technology. That has led us to make this change in strategy, which has led to the write-off of some of our old technology.”
The reduction actions are expected to reduce expenses by an additional $17 million to $20 million per quarter beginning in the second quarter, resulting in an anticipated quarterly base operating expense run rate of less than $200 million.
In April, on the heels of another earnings warning, Acxiom announced company-wide earnings reductions of 5%, with an option to take a 20% pay cut and receive stock options. The move was part of a $70 million cutback on anticipated fiscal year 2002 expenditures, which will also include sales and marketing expense reductions.
For the second quarter ending Sept. 30, the company expects revenue in the range of $215 million to $225 million.
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