S1 cuts jobs; warns of Q3 loss

S1 cuts jobs; warns of Q3 loss

US fintech firm S1 Corporation is cutting eight per cent of its workforce and closing some operations in a bid to reduce annual operating costs by $20m to $22m by the end of the year.

S1 shares dropped almost 30% in pre-market trading this morning to $3.00 after the firm said it would reduce its workforce and consolidate some facilities in a move to cut operating costs, for which the firm will record non-recurring charges of between $14m and $15m.

The Atlanta-based vendor also warned that its third quarter revenues will fall below expectations. S1 now expects revenues for the quarter ended 30 September 2005 to be in the range of $57m to $58m, compared to forecasts $61m-$64m, while revenues at its financial institutions segment are expected to be around $47m-$48m, compared to forecasts of $53m to $55m.

The firm also forecast a loss of nine to ten cents per share in Q3. Excluding non-recurring charges, S1 anticipates the financial institutions segment to report a loss of between four and five cents per share.

Under the restructuring, S1 says Matt Hale, who will also retain his current role as CFO, will actively lead the organisation responsible for the North American retail banking, global wholesale banking and insurance markets.

Johann Dreyer, the head of the recently acquired Mosaic Software business, will lead the organisation serving the community financial, international retail banking, and global ATM/POS markets. The vendor's FRS and Edify businesses will be led by Greg Orenstein.

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