Sources close to Computer Associates say the company will lay off at least 1,000 employees as it ramps up its offshore development and moves to cut costs.Computer Associates International Inc. is planning to lay off at least 1,000 employees as it ramps up its offshore development, according to sources close to the Islandia, N.Y. company.
The layoffs, which could represent as much as a 10 percent reduction of its 15,000 employee payroll, are expected to come in the first week of October, sources said.
At the same time, CA is planning to add 400 to 600 positions at its development center in Hyderabad, India, a company representative said.
The moves come as part of CA's move to reduce costs, which the company indicated in its first-quarter earnings report. "We are taking a hard look at our expense structure and looking for ways to be more efficient and cost-effective," the CA representative said.
"Layoffs wouldn't be a surprise. But if it's 1,000—that's big," said Ray Paquet, an analyst with Gartner Inc. in Lowell, Mass. "A lot of people are picking up their hiring in India. Why should [CA] be any different?" he added.
Paquet and sources close to the company said CA has been streamlining its oversized product lineup, although CA denied the claim. "They have been pruning the portfolio. That is standard good business practice," Paquet said. "That leaves some users in the lurch, but welcome to the world of Darwin."
According to one source, CA has cut products for the IBM VSE mainframe operating environment.
"We are not shedding products. We continue to apply appropriate development and support resources to our customers' needs," the CA representative said. "The VSE platform continues to be an important platform for CA and our customers."
CA would not comment on the layoffs.
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