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CA Cuts 800 Jobs

These are turbulent times in Islandia. Computer Associates International Inc. (CA) (NYSE: CA) announced today it is cutting its global workforce by 5 percent, or 800 positions.

The news comes just a week after the company reached an agreement with the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC), drawing a line under the accounting scandal that had dogged CA for the last year. Former CEO Sanjay Kumar and one-time head of worldwide sales Stephen Richards have also been indicted on securities fraud conspiracy and obstruction charges (see CA's Mea Culpa).

A restructuring plan unveiled this morning will touch nearly all of the companys departments, with a strong emphasis on improving productivity, simplifying the company’s product portfolio, and boosting marketing efficiency.

CA executives have expressed their desire to rein in the company’s costs for a number of months. Most software vendors are going through a tough time at the moment, thanks partly to falling license sales and competition from Linux vendors (see Software Slump Is Deal Time).

Earlier this year, CA lowered its guidance for fiscal year 2005, blaming poor performance in the services market (see CA Posts Mixed Results and CA Warning Points to Product Holes).

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