Siebel Systems

(SEBL)

on Monday outlined more details on its restructuring, announced last month, and indicated that it continues to see pricing pressure in its customer-relationship management market.

In a midquarter question-and-answer session with analysts, company officials passed on the opportunity to update guidance and comment on the economy and recent rumors of a new product targeting the middle market.

"There clearly is price pressure across the board," CEO Tom Siebel said on the conference call. "People are still very, very cost conscious. Everybody is slashing costs, slashing costs, slashing costs."

But Siebel declined to answer a question about the economy and how the software business looks this quarter. "The last time I answered that question, I had to pay a $200,000 fine," he quipped, referring to a past Regulation FD fine he was charged. "That was with 300 people and

Reuters

and the

San Jose, Calif.

Mercury News

in the room."

Indeed, at the start of the question-and-answer session, Siebel said the call was

not

designed to update guidance or provide more detail on the pipeline. Rather, it was a forum for the company to comply with Regulation Fair Disclosure. Earlier this year, the company reported it had been contacted by the

Securities and Exchange Commission

about a possible Regulation FD violation after a

CBS MarketWatch

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article reported on a spike in the company's shares following an April 30 dinner attended by Siebel CFO Ken Goldman and a number of analysts.

Siebel, who has stumbled in the past with outspoken but incorrect predictions of a turnaround, declined to venture another guess Monday. "In the last three years, we've seen a number of false starts in this economy that led people to kind of see some opportunity..." Siebel said. But the slightest thing -- such as the SARS outbreak -- "siderails everything."

"Right now we remain cautious about the short term and midterm," Siebel said. "We believe we're poised to grow this thing."

But in July, Siebel announced it would cut 490 employees, or 9% of its staff, amid a nearly 18% year-over-year decline in second-quarter revenue. In addition, the company said it wanted its head count to fall to 5,000 -- implying an additional reduction of 99 positions through attrition -- by the end of the third quarter. The company has said its target is to achieve operating margins of 15%.

On Monday, Siebel Systems CFO Ken Goldman said the company expects to incur a restructuring charge of $80 million to $100 million in the third quarter.

Siebel indicated that 465 people left the company and 25 more slated to leave have not yet been notified because of labor rules in France.

As a result of the restructuring, Siebel expects to cut $30 million in quarterly expenses by the fourth quarter and $40 million per quarter by mid-2004, Goldman said.

Siebel attacked the notion that the customer-relationship management market has been plagued by shelfware, as many industry analysts report. However, he noted that the rate of customers going live with Siebel software was twice the rate of new customers purchasing the software, suggesting that customers are working their way through previous purchases.

Siebel said one bright spot in the company's business was business analytics, which he described as "a pretty exciting business opportunity. We see a lot of growth there," Siebel said.

Siebel declined to comment on rumblings of the company launching a new hosted product targeting the middle market. "We committed to the middle market," he said, noting the company has been playing there since 1996. "At this time we don't have any announcements to make."

Siebel did counter suggestions of intense competition from such middle-market players as

Microsoft

(MSFT) - Get Report

and privately held

Salesforce.com

. But Siebel suggested the overall numbers remain low: He said his company faced off against Microsoft in six deals in the second quarter, up from two in the first quarter, and two deals against Salesforce.com in the second quarter, up from one in the first quarter.

Shares of Siebel declined 29 cents, or 2.8%, to close Monday at $10.10. Shares remained unchanged in after-hours trading.