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Commerce One Cuts Nearly 50 Percent of Jobs, Restructures

Commerce One (Nasdaq: CMRC) said late Monday it will cut about 1,300 of its 2,800 jobs as it spins off some operations.

The Pleasanton, California-based company, which makes e-commerce software and operates online purchasing exchanges, said that about 700 of the layoffs will be job eliminations primarily among professional services, marketing, sales and administrative workers.

The other cuts will come from the spinoff of “a number of services operations that are not directly related to Commerce One products,” the company said.

Focus on R&D

Commerce One said it will continue to invest deeply in research and development.

“We are maintaining our focus on delivering the products and services our customers need to be successful,” Commerce One chairman and chief executive officer Mark Hoffman said. “By aggressively investing in our collaborative commerce product line, we feel that we are well positioned to compete in the current economic climate, and, more importantly, during a recovery.”

The company said the job cuts will be made during the fourth quarter. Executives will provide further details on the plan Wednesday, after third-quarter results are released.

Shares Fall

Commerce One shares fell Tuesday morning, losing 45 U.S. cents, or 12.9 percent, in early trading to fall to $3.25. A year ago, the shares traded at more than $75.

Last week, Commerce One lowered its outlook for the quarter ended in September, blaming “poor economic conditions” for an expected loss before charges of 24 to 25 cents per share, on revenue of $80 million to $83 million. Analysts were reportedly looking for revenue of $90.6 million and a per-share loss of 23 cents.

Commerce One, like others in the online marketplace business, has been shifting its focus to sales of the software that powers those marketplaces, and away from operating the exchanges for customers. The company has a close relationship with German software maker SAP, which is said to account for about half of Commerce One’s software sales.

Bargain Basement

There has also been talk of a possible acquisition of Commerce One by SAP, which already holds 20 percent of Commerce One’s shares. Analysts have noted that Commerce One shares are trading at bargain-basement levels.

Press reports said a German magazine article published last weekend predicted that Commerce One would slash its workforce to make such an acquisition possible. The companies issued no statements on those reports.

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