Ariba Inc., a business-to-business e-commerce platform provider, will slash about 700 employees, 30 percent of its work force.
It also called off its planned acquisition of Agile Software in an effort to combat lower-than-expected second-quarter earnings and overall deteriorating market conditions.
The company said revenue for the second quarter would total around $90 million, roughly half of the $180 million windfall originally projected for the period by Wall Street analysts.
“At the end of the quarter, we experienced a large unexpected drop-off in our sales closure,” said Keith Krach, chairman/CEO of Ariba. “While many customers selected Ariba's technology, spending decisions at the executive level were postponed as customers evaluated their budgets in light of the prevailing economic uncertainty.”
The company also planned to take a one-time write-off for investments, real estate commitments and other items, Krach said.
In addition, Ariba's proposal to acquire California-based Agile Software, at a stock value of $2.55 billion, will be killed without either party paying any termination fees, executives at both companies said.
“Under the current conditions, the predictability of our business going forward is very limited, so it's important to realign our own expense structure immediately,” Ariba chief financial officer Bob Calderoni said.
Ariba officials had said they planned to integrate Agile's collaborative services into its BTB commerce platform and to expand its network. Agile also was expected to bring a number of top-level technology clients into the mix, including MyAgile.com, which offers online marketplaces, custom part procurement, wireless access and components research.