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FileNet Will Cut Jobs, Move Unit to O.C.

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TIMES STAFF WRITER

FileNet Corp. said Tuesday that it plans to lay off an undetermined number of its 1,650 employees and move a Boston-area subsidiary to Orange County to help offset an anticipated $9-million first-quarter loss.

Other expenses, including a $2.5-million to $3-million charge related to the subsidiary relocation, are also expected to dampen second-quarter results.

Company executives said the first-quarter loss, amounting to 60 cents a share, will stem from costs incurred in boosting FileNet’s sales and product development operations to handle several large contracts that never materialized.

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FileNet plans to announce results for the period April 23.

The Costa Mesa-based company, which makes computer-based document storage systems, said quarterly sales this year fell almost 30% to $47 million from $66.7 million a year ago.

“New orders were unexpectedly weak” both in Europe and in North America, said Ted M. Smith, president and chief executive.

Industry analysts said FileNet, which acquired three small software companies last year, apparently has had difficulties integrating the operations.

“There seems to be something fundamentally wrong with management either in its financial controls or its communication with the sales staff,” said Patrick Mason, an analyst with San Francisco brokerage Volpe Brown Whelan & Co.

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