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To: Jim Willie CB who wrote (2443)	7/17/2002 2:53:56 PM
From: stockman_scott	Read Replies (1) \| Respond to of 89467

Sanjiv Sidhu announces large layoff for i2 to survive Wednesday, July 17, 2002 Sanjiv Sidhu, founder and chief executive officer of i2 Technologies, has announced 30 percent of the workforce would be laid off as a cost cutting measure. NEW YORK: This means 1,400 people in the Dallas-based firm would be added to the thousands of others that suffered from the Enron debacle, and WorldCom and EDS job cuts. At a conference call briefing Sidhu also said several operations might be shifted to India to cut costs further. The leading provider of supply chain management solutions Tuesday announced final results for the second quarter of 2002, which it had warned two weeks ago would not be great. i2 reported a loss per share of $1.77 for the second quarter of 2002, including a $671 million charge to take a valuation allowance on deferred tax assets, compared to a loss of $2.08 per share in the second quarter of 2001. It does not expect to benefit current or future losses for income tax purposes. The company reported total revenues for the second quarter 2002 of $120 million, compared to $249 million for the second quarter of 2001. Total revenues include software licence revenues of $26 million for the second quarter of 2002 and $106 million for the second quarter of 2001. Sidhu's problems started not just from the downturn but when some big name companies complained about the services rendered by i2 last year. But i2 said customers continued to invest in its technology and noted that 77 customers went live this quarter, "far more than any other supply chain vendor -- including Adidas-Salomon AG, Argos, Barnes & Noble, Bell Helicopter Textron, Nippon Steel, SGI, and Siemens. "The cuts are across the board," said Sidhu during the conference call, but they are smallest in the services sector, and they start next week. He blamed the environment and shrinking IT budgets globally. "We are intensely focused on returning the company to profitability as quickly as possible. As the leading supply chain vendor in the market today, we will be aligning our sales efforts, product development, and delivery for maximum business efficiency, while never losing sight of our customers," said the former billionaire entrepreneur. He also outlined plans to improve product development costs. "There's the opportunity to continue to exploit our India based capability even further... Some of our experienced software developers have moved to India. So our efficiency level will be higher than what our competitors are able to do," Sidhu stressed. The firm announced a restructuring plan that it said will focus on i2's major solution suites where it has the most robust capabilities and customer base. Though some analysts expressed skepticism about i2's ability to shake off the high debt, Sidhu said he was taking necessary steps to reduce its operating costs by at least 30 percent by year-end 2002, with a goal of bringing operating expenses in line with recent revenue levels. This involves a restructuring charge of over $50 million in the third quarter to cover severance, facilities closures and other costs associated with the restructuring. "Delighting our customers is at the heart of our strategy," said Sam Nakane, i2 chief operating officer. "We have the largest number of customers in the market today and over 14 years of experience. i2 has a winning combination of the best customers, partners and solutions in our industry, and these will provide the basis for our future success." Established in 1988, i2 continues to claim its mission is to deliver $75 billion in value to its customers by 2005. Sidhu founded i2 Technologies and grew it into a market leader, serving clients as Texas Instruments, IBM, Johnson & Johnson, Lipton, Ford Motor Company, Dell Computer, Toshiba, Warnaco and Coca-Cola. In March 2000, he led the company through a merger with Aspect Development, another Indian American founded company, the largest software industry merger to date. Sidhu has a multinational team of nearly 5,000 employees.