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Ariba warns on 2Q
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April 2, 2001: 4:56 p.m. ET
Software company plans 1/3 cut of work force and ends merger plans with Agile
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NEW YORK (CNNfn) - Ariba Inc., which makes Web-based procurement software, said Monday its second-quarter revenue will be significantly lower than previously anticipated and the company now expects to lose money for the quarter.
Ariba also announced plans to cut a third of its work force and terminate its expected merger with Agile Software (AGIL: Research, Estimates), originally valued at $2.6 billion, which has since fallen to about $400 million as Ariba stock plunged.
 Mountain View, Calif.-based Ariba said it expects to lose 20 cents per share, with revenue of $90 million. Analysts surveyed by First Call expected the company to earn 5 cents per share.
The company blamed a slowdown in both the economy and technology spending for causing an unexpected drop-off in sales.
"Under current market conditions, the predictability of our business going forward is very limited, so it's important to realign our own expense structure immediately," said Bob Claderoni, Ariba chief financial officer, in a statement.
Ariba said it will cut 700 jobs to reduce spending and will also incur "significant one-time write-offs relating to, among other things, investments and real estate commitments."
The company announced a stock-swap deal for Agile in January to expand its business-to-business offerings, but Ariba said both companies have changed their minds due to the economy and current market conditions.
Shares of Ariba (ARBA: Research, Estimates) dropped 3 cents to $6.50 after-hours. Shares of Agile dropped 88 cents to $9.62. 
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