FARGO, N.D. (AP) -- Software maker Great Plains is laying off 170 workers as part of a plan to ''dramatically reduce'' its expenses, the company's chairman and chief executive officer said Tuesday.
The move is necessary despite record fourth-quarter revenue of more than $59.6 million, Great Plains Chairman Doug Burgum said. While strong, the revenue fell far short of the company's own expectations and led to fourth-quarter earnings of only 9 cents per share.
Company officials had predicted 33 cents per share earlier this year. Great Plains later revised its prediction to between 5 and 10 cents per share, and analysts were expecting earnings of 7 cents per share.
''We've reached a very difficult and painful decision,'' Burgum told investors in a conference call to announce the fourth-quarter earnings. ''Great Plains has gone for its entire 19-year history without a layoff.''
Burgum and Tami Reller, Great Plains' chief financial officer, said employees were told of the layoffs earlier Tuesday.
Great Plains stock fell sharply earlier this month following the initial announcement that the company did not expect to meet earnings expectations for the quarter that ended May 31.
The stock value fell 46 percent, but Burgum said the company ''is not the victim of a bad market.''
''There were things that we could have done differently and better,'' he said.
The stock closed the day down 37.5 cents to $19.8125 on the NASDAQ market. Earnings were announced after the closing bell.
Company officials sat down earlier this month to go over a ''detailed cost examination,'' and determined that layoffs had to be considered, Burgum said. Final plans for the job reductions were put together over the weekend.
Great Plains, a leading provider of financial software for mid-market businesses, has about 2,200 employees, about 900 of whom work in Fargo.
About 40 of the layoffs are coming through early retirement offers extended to employees with at least five years at Great Plains, Burgum said. The other cuts will be made throughout the company but most likely will be in Fargo, the company's headquarters, he added.
''We do not believe that any of the positions eliminated will have any effect on our ability to move forward,'' Burgum said.
Great Plains blamed the lower-than-expected profits on a decline in software sales in December that coincided with Y2K fears.
The company suggested many Great Plains customers reduced investments in information technology as the new year -- and fears of computer crashes -- approached.
Despite the job cuts, Reller said Great Plains' balance sheet remains strong and company officials are confident profits will continue to increase in the coming year.
On the Net:
Great Plains: http://www.greatplains.com
Brainerd Dispatch ©2013. All Rights Reserved.