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By Mel Duvall

Software giant CA has brought bad news to the recovering-economy party with the announcement that it plans to cut about 1,000 jobs, or 8 percent of its workforce.

The job cuts, which are part of a larger restructuring and consolidation, were revealed by the Islandia, N.Y.-based company in a filing with the Securities and Exchange Commission.

In a memo to employees, CA chief executive Bill McCracken said the majority of the cost-control steps will be completed by the end of April, and that all steps will be concluded by the end of the fiscal second quarter. The restructuring will primarily take place in North America, but other regions will also be affected.

In the memo, McCracken noted that it has been six months since the company announced a new corporate strategy, which included establishing a position in high-growth markets such as cloud computing. While he said CA has had some early successes, the company needed to do more -- including becoming leaner, more focused and more competitive.

"As difficult as they are, these actions are necessary to focus our skills and investments on those activities that support our corporate strategy and have the greatest impact on our performance, growth and customer loyalty," McCracken said in the memo. "The industry and the market are changing, and we have to change too."

McCracken said he plans to visit some of the company's larger offices over the next three to four weeks to personally convey the company's strategy, and by the middle of the year he plans to have visited all of the company's major offices worldwide.

McCracken was named CEO in January following the announced retirement of John A. Swainson in September. McCracken has been on CA's board since 2005 and previously spent 36 years at IBM.

As a result of the restructuring and layoffs, CA expects to incur pretax charges of $50 million, which includes $47 million in severance and about $3 million in costs related to consolidating its global facilities.

The company, which specializes in software to manage large corporate IT infrastructure, also expects results to be weaker in its current fiscal year. In the filing CA said it now anticipates non-GAAP earnings per share will come in at the lower range of its forecast of $1.60 to $1.71 per share.

Comments (1)

	1. 04-06-2010 16:32
	It should be noted that CA has been busy gobbling up cloud companies in recent months. It bought Nimsoft, a company that makes availability monitoring software for $350 million; 3Tera, a company that provides monitoring software for managing public and private clouds; and Oblicore, a company which provides software for managing service levels.    One analyst noted that the company seems to be positioning itself around three pillars of growth: the cloud, infrastructure as a service, and virtualization and the job cuts would be associated with businesses no longer considered core. Registered

Mel Duvall

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