Business software maker Egenera Inc. notified employees yesterday it = will=20 eliminate 87 jobs worldwide, including 30 to 35 at its Marlborough = headquarters,=20 in the latest sign that Massachusetts technology companies are bracing = for a=20 worsening economic downturn.
Egenera said it will trim its sales force about 40 percent by = shifting its=20 model to rely on hardware vendors like computer maker Dell Inc. to = market=20 Egenera's software to businesses. Until now, the company has sold = software=20 directly to business customers in the United States.
"We're prepared for a fairly dramatic economic slowdown," said Mike = Thompson,=20 Egenera president and chief executive. "We've seen signs of a slowdown = in the=20 past year, so we dialed back our expenses. Now when we talk to our = customers=20 around the globe, we're seeing the slowdown almost across the = board."
Egenera sells "virtualization" software, technology that enables one=20 networking machine in a corporate data center to behave as many, running = different operating systems at the same time. Its customers include = hundreds of=20 financial, healthcare, manufacturing, service, and retail businesses in = the=20 United States and worldwide. But in the third quarter, ended Sept. 30, = all of=20 its domestic orders came from federal agencies, as businesses scaled = back on=20 information technology spending, Thompson said.
Other Massachusetts technology companies, which had hoped to escape = the=20 fallout from an economic crisis originating in the housing and financial = sectors, also have begun cutting payrolls. California-based = THQ Inc.=20 yesterday said it is closing Helixe, a Burlington software studio that = makes=20 games for the Nintendo=20 DS handheld videogame system, eliminating 30 jobs.
= Plexus=20 Corp., a maker of printed circuit boards, told the state's Executive = Office=20 of Labor and Workforce Development last month it will be closing a plant = in Ayer=20 between now and Jan. 31, idling 170 workers. ACT Electronics Inc. = indicated it=20 would close a Hudson electronic assembly plant on Nov. 28, shedding 27 = jobs,=20 according to a published report.
Tewksbury's = Avid=20 Technology Inc., a maker of video editing software, recently said = it's=20 laying off 54 workers in Massachusetts and 20 in New Hampshire. And at = least=20 three dozen Ve= rizon=20 Communications engineers in Massachusetts and Rhode Island will lose = their=20 jobs this month as part of a broader retrenchment at the telecom = company.
The uncertain environment is making companies anxious about keeping = costs in=20 line with projected sales, analysts said.
"There is a discontinuity taking place where the normal market = behavior=20 ceases to exist," said Roger L. Kay, president of research firm Endpoint = Technologies Associates in Wayland. "Some of it is just caution, not = wanting to=20 have a lot of expenses if volume declines. All the fixed costs come = under=20 scrutiny, from inventories to payrolls."
Egenera, backed by venture capital, was founded in March 2000 by Vern = Brownell, a former chief technology officer at the Go= ldman=20 Sachs & Co. investment bank. While it initially focused on = selling blade=20 servers, computing machines that carried more processing power in less = rack=20 space, it has gradually transitioned in recent years to virtualization = software,=20 a new technology that enhances the efficiency and flexibility of = computer=20 servers, storage, and networking gear.
While the company previously had marketed its software overseas = through=20 partners like Digital China and the Fujitsu Siemens joint venture, it = had sold=20 directly to end users in the United States. By switching to an indirect = sales=20 channel, Egenera can reduce its sales force, Thompson said. The company = will=20 retain some of its direct sales people to continue serving existing = customers,=20 he said.
Thompson said Egenera hopes to eventually go public in an initial = public=20 offering, but he conceded the IPO market is frozen for now as fear = dominates=20 financial markets. "There's no IPO market today," he said. "So we're = going to=20 weather the storm until there is one."
Globe staff reporters Hiawatha Bray, Todd Wallack, and Erin =
Ailworth=20
contributed to this story. Robert Weisman can be reached at
=A9 Copyright 2008 Globe Newspaper=20
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