Corel is to chop a fifth of its workforce following second quarter losses of $8.3 million (#4.9 million).
The company's European regional facilities will be consolidated in Ireland, creating 40 new jobs in Dublin.
Corel said its losses were better than expected on sales of $63 million (#37 million). "Our second quarter results, which are better than analysts predicted, clearly show the fulfilment of our commitment to return to financial stability," claimed Michael O'Reilly, Corel's chief finance officer.
Corel will close its engineering facilities in Utah with the loss of 530 jobs, while expanding facilities in New Hampshire and Ottawa with the creation of 160 jobs.
"This decision was not made lightly and we had some tough choices to be made in cutting out non-profit making activity," said Kylee MacKay, Corel's communications manager for the UK and Ireland. The company hopes to save $33 million (#20 million) annually in the consolidation.
Complacency in the face of competition from Microsoft has been the main reason for Corel's slide, according to Neil Ward-Dutton, senior consultant with Ovum. "Corel thought it could take on Microsoft," he said. "When it was in a comfortable position, Corel stopped innovating and pushing new products out of the door."
When innovation did come from Corel it was in the wrong direction, Ward-Dutton continued. "Corel has made some dumb moves," he commented. "Someone had the idea of moving its office suite to run on thin clients using Java.
It ran like a three-legged dog and was a massive flop, which lost the company a huge amount of research and development money."
Corel will not survive in its present form, Ward-Dutton predicted. "The company has some clever and loyal R & D people, but needs to come up with something completely different," he said.
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