Internet banking systems vendor Brokat Technologies is to cut a fifth of its workforce and close a number of its international offices as it seeks to stem losses and reign in spending.
The cost saving measures will result in 300 job losses, reducing the German company's international workforce to 1100 employees. Brokat is also writing off certain other assets related to subsidiary operations and will close offices in the Netherlands, Belgium and Israel. The company says it will also take action to reduce its discretionary spending across its worldwide operations.
Brokat says the measures should yield cost savings of approximately $13 million (EUR15 million) in the fourth quarter of 2001. The company says it still expects to break even by year-end, an assumption which has been questioned by analysts and the markets. Brokat's stock fell a further 15% to EUR6 this morning.
The retrenchment follows a rapid expansion in the company's US operations and a slowdown in technology spending in its core European markets. Two hundred of the job losses are expected to be made in the US.
Brokat is currently focussing its investments on becoming a major player in the mobile business space, says Stefan Roever, CEO and co-founder. "Our recent win of Vodafone for Brokat PaymentWorks software, following on our contract with T Motion, a Deutsche Telekom subsidiary, clearly underscores the need to marshall our internal resource behind an m-business strategy."