Riversoft axes jobs in attempt to save £5m a year

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Riversoft, which produces software for monitoring networks, yesterday cut almost a third of its 310-strong workforce in response to "challenging market conditions".

The cost-cutting drive will save it around £5m a year although it expects to take a £1m charge in the third quarter to pay for the move. The job cuts will fall across its global operations, stretching from Richmond in south-west London to San Francisco, and come on top of the 20 job losses announced in May.

Phil Tee, chairman and acting chief executive, said: "Despite the difficulty of this decision, we are acting promptly and decisively in the interests of our shareholders to reduce costs in the face of challenging market conditions."

He said the company's core operations would not be affected by the move and that management was "totally committed" to its strategy going forward.

Shares in Riversoft finished unchanged at 28.5p but well beneath their December float price of 94p.

The company had warned in early July that second-quarter sales had fallen "significantly below" market estimates as customers failed to sign off new orders. It said then that it expected to report a Q2 loss of £11.6m on sales of £1.2m and noted that it still had in excess of £70m cash left.

That alert followed the shock announcement of the retirement of Dominic Gattuso, chief executive, with the company's first-quarter results statement in May.

In the first three months of the year, Riversoft recorded a pre-tax loss £8.3m compared with a loss of £11.2m in the fourth quarter of the previous year, on sales of £2.6m up from £2.3m.