Intuit to Cut 7% of Workforce

Updated from 5:55 p.m. EDT

SAN FRANCISCO -- In a sign of the economy's harsh impact on software firms catering to the domestic market, Intuit(INTU Quote - Cramer on INTU - Stock Picks) announced Thursday that it will cut 575 jobs, or 7% of its workforce, and take a restructuring charge.

The maker of tax and accounting software for small businesses said it would take a pre-tax charge of $22 million in its seasonally weak fiscal fourth quarter, which closes at the end of July. The move is expected to reduce earnings by 4 cents a share.

Intuit said its fourth-quarter loss, excluding special items, will range between 7 cents and 9 cents. Analysts were already expecting Intuit to show a loss of 5 cents a share, excluding special items, according to Thomson Reuters.

The stock was up 54 cents, or 1.9%, to $28.91 in after-hours trading.

Intuit sells QuickBooks accounting software in the U.S. market, where small businesses are struggling with a contraction in domestic spending. New business starts have reportedly slowed with the economic downturn.

QuickBooks revenue grew 5% year over year in the third quarter, but at a much slower rate than the year-ago period.

A company spokeswoman noted that Intuit has not lowered revenue expectations for the fourth quarter, adding that the charge is due only to the reorganization.

At the end of the third quarter, Intuit projected full-year revenue of $3.05 billion to $3.06 billion, implying fourth-quarter revenue ranging from $457 million to $467 million, below analysts' expectations then for revenue of $471.7 million.

« Previous Page

1 2

Next Page »