Compuware To Lay Off 160 Employees, Close Or Downsize 16 Offices
DETROIT -- Compuware Corp. (Nasdaq: CPWR) will cut about 160 employees, or 5 percent of its work force, as part of a restructuring plan announced Jan. 25 to cut $60 million in expenses over the next three years.
Compuware announced the cuts as part of moves designed to boost shareholder value when it rejected an $11-a-share buyout offer from a New York investment firm.
In a filing with the federal Securities and Exchange Commission announced Friday morning, the Detroit software and IT services provider also said it will close or reduce in size "approximately 16" offices worldwide. Compuware said this move would also include the early termination of some operating leases.
The SEC statement said Compuware approved the plan Feb. 25 and "immediately began communicating its decision to affected employees." The statement said the cuts will come "across all operating and administrative divisions of the company."
The company said the moves would save Compuware $23 million in annualized cost savings over the next 12 to 18 months.
In connection with the move, Compuware said it planned to record a charge of approximately $25 million for the costs associated with the reductions. Of the total amount, approximately $15 million is severance related and $10 million is related to early termination charges and costs to reduce the occupied floor space in certain offices.
Compuware said about $16 million of the restructuring charge is expected to be taken in the current quarter. The balance of the restructuring charge will be recognized when the appropriate criteria is met for any actions remaining after March 31.
Compuware said it expects to complete these activities, described as the "initial phase" of its expense-cutting, by Sept. 30.
In midday trading Friday, Compuware stock was up 12 cents or 1 percent to $11.73 a share. The tech-heavy Nasdaq stock index was up 0.2 percent.
