Travel software company Datalex has confirmed the closure of its Malahide office with the loss of 29 jobs. The Dublin job cuts had been first signalled last month.
The company added that it is to cut its global workforce from 487 to 379 - a decrease of 22% - in response to a slowdown in the company's levels of business activities.
As well as the 29 job cuts in Malahide, Datalex is closing its offices in Johannesburg, South Africa and one of its US offices in Scottsdale, Arizona. It hopes to cut costs by around $4m by the end of the year.
The company, which includes Aer Lingus, British Airways, Delta, Ebookers, KLM and Quantas among its customers, also announced this morning that its second quarter revenues stood at $7.1 million, a decrease of 11% on the same time last year. The figures were in line with the company's trading update on July 6.
E-business revenues increased year-on-year to $4.5 million and were down 46% from the previous quarter's figure of $8.3 million. Datalex said that its product revenues also decreased by 48% to $1.3 million. The adjusted loss per share was 14 cents compared to eight cents in the second quarter of 2000. Net operating losses grew by 79% from the first quarter to $9.3m.
The gross margin for the second quarter of the year fell to 6% from 36% from Q1, before non-cash share compensation charges.
Datalex, which signalled its restructuring plans last month, said the cutbacks were required because of a slowdown in converting new business opportunities into contracts during the second quarter and a delay in expected revenues from existing customers in certain cases.
The company also said that it would make a significant reduction in marketing and travel costs and would tighten up control in all areas of its business.
Commenting on today's results and restructuring measures, Datalex CEO Neil Wilson said: 'A slowdown in spending among potential new customers and some of our existing customers means performance for the second quarter of this year has been disappointing'.
'We have therefore undertaken a thorough review of the business and taken what we believe are appropriate steps to cut costs sufficiently in order to cope with the current market conditions. The crucial factor in reducing our costs was to insure the viability of our business remains intact and we believe that we have achieved this objective,' he said.
Wilson said there were positive signs for the technology sector in the travel market, but that due to the global economic slump, it was prudent to remain cautious about revenue prospects for the next two quarters.
'That said, the travel industry remains one of the world's major industries and Datalex has successfully developed a strong product portfolio and market presence over the last two years,' the CEO added.
'These factors, combined with the actions we have taken to return the company to profitability, give us confidence we will be well positioned when more favourable trading conditions emerge,' Wilson added.
Datalex shares closed down five cents at 1.10 euro in Dublin today.
