Meet the new boss at Siebel, same as the old boss.
George Shaheen, the San Mateo, Calif.-based company's new CEO sounded much like his predecessor in reporting the company's disappointing first quarter earnings.
"We were all disappointed by our recent financial performance, but we have a strong portfolio of award-winning products," Shaheen said, on a conference call with financial analysts. "Now we have to focus on how we're going to leverage these substantial assets moving forward."
For the first quarter of 2005, Siebel reported a net loss of $4 million, or 1 cent a share, compared to a net profit of $31 million for the first quarter last year.
Former CEO Mike Lawrie, the man brought in from IBM to replace founder Tom Siebel to lead the company in its "next chapter," had warned of the poor quarter in an earnings forecast at the beginning of the month. Lawrie blamed deals slipping into the second quarter and poor execution for the earnings. One week later he stepped down as CEO and was replaced by Shaheen, a member of the board of directors.
At Siebel's European User Week in Barcelona last week, Shaheen said the company would continue with its plan to offer custom-built software, reiterating that strategy in Wednesday's conference call. The company will also focus on areas that are performing well, such as analytics and the services business, Shaheen said.
Siebel estimates the market for custom-built software at $20 billion and intends to capture a significant portion of it with a new service-oriented architecture that will be available in its version 8 product.
"For the past 11 years we've said people building applications themselves is the biggest competition we've faced," said David Schmaier, executive vice president. "We announced a $200 million to $250 million joint development project with IBM Microsoft a few years ago and [version 8] is the fruit of that project."
Siebel will also begin a number of layoffs in order to cut back on costs, according to Ken Goldman, Siebel's chief financial officer. The cuts would come in two phases, with the first phase coming in the second quarter and phase two in the second half of the year. In 2003, Siebel laid off nearly 2,000 people in a massive cost-cutting plan. It currently has about 5,300 employees.
The company will also launch a new marketing campaign "and its mantra is it's all about the customer," Shaheen said.
"I recognize we have not delivered consistent execution and financial results," Shaheen said. "I am committed to improving customer and shareholder value for better and more consistent execution."