ProvisionSoft Inc. executives say the company is undergoing a major layoff today -- cutting its headcount by about half -- as its parent company, CMGI Inc., attempts to find a buyer for the struggling storage resource management (SRM) software firm.
Mark Reid, president and CTO of ProvisionSoft, says about half of the company's 40 remaining employees will be let go today. The layoffs "keep expenses in line with current business conditions," he says.
The Andover, Mass., company has already cut its headcount substantially in recent months. In July 2002, ProvisionSoft had 76 employees (see Startup Puts SANs on Cruise Control).
The cutbacks come as CMGI, a technology and e-commerce incubator and the majority owner of ProvisionSoft, is actively seeking to sell the unit. In its 10-Q filing with the Securities and Exchange Commission (SEC) on March 17, CMGI said it plans to divest all of its interests in ProvisionSoft "in the near future" and noted that $1.4 million in R&D expenses on its balance sheet for the quarter ended Jan. 31, 2003, were attributable to ProvisionSoft. CMGI representatives did not return phone calls requesting additional information.
ProvisionSoft was founded in April 2000 as CMGion, which was a joint venture of CMGI, Novell Inc. (Nasdaq: NOVL), Sun Microsystems Inc. (Nasdaq: SUNW), and Compaq. CMGI held a majority stake; Novell, Sun, and Compaq each invested $20 million. The company was supposed to develop Internet caching software and services for service providers.