Netscape layoffs could be 400

Netscape Communications (NSCP) will lay off up to 400 employees when it announces its quarterly results later this month.

As part of a restructuring effort aimed at controlling costs, the software company announced last week that it will take a fourth-quarter restructuring charge of about $35 million in connection with staff reductions, the closure of certain facilities, and other write-offs. The restructuring is intended to enable the company to focus its remaining resources on its enterprise software business.

Rosanne Siino, vice president of Netscape's corporate communications, told CNET Radio that the restructuring already is in progress, but said details of the layoffs would not be available in full until the company reports its earnings on January 27 after the markets close.

She said the number of layoffs may go as high as 400, or 12-1/2 percent of the company's 3200 employees.

"The 400 number was an internal target of contractors and full-time heads. The actual number to be affected will be talked about January 27, but that number is a target that was given based on the expense reduction that we were trying to hit," said Siino. "It is contractors and full-time [employees].

Netscape expects to miss Wall Street's expectations because of lower-than-anticipated revenues for its client and enterprise software. The company cited pricing competition from Microsoft (MSFT) and IBM (IBM) in the enterprise market as the primary reason for its weakened performance.

The company said its fourth-quarter net loss likely will range between $85 million and $89 million. Excluding $87 million in merger and restructuring charges, the company anticipates a loss of between $14 million and $18 million, or 15 cents and 19 cents a share. Analysts were expecting profits of 14 cents a share for the quarter before the preliminary warning was given, according to First Call.