Cysive to Lay Off 40 to 50 Workers; Restructuring to Cost Up to $8 Million
Cysive Inc., a Reston Internet consulting firm, yesterday announced its plan to lay off workers for the first time in its seven- year history and lowered projections for its revenue and earnings in the quarter that ends Dec. 31.</br></br>The company expects to cut 40 to 50 non-engineers, or 13 percent to 16 percent of its staff. Cysive also will freeze additional hiring, company officials said.</br></br>The layoffs are part of a broader restructuring effort that will cost Cysive up to $8 million before taxes. Between $1 million and $2 million will go toward severance pay, the rest toward bad debt and real estate restructuring.</br></br>Cysive, which customizes software systems, is reeling from cancellations, delays and spending freezes among some of its customers. In August the company dropped its largest customer in a payment dispute and said it would forgo nearly $4 million in revenue in the third quarter and another $1.5 million this quarter. At least one Cysive client could possibly file for bankruptcy protection, Cysive officials said yesterday in response to questioning from analysts.</br></br>As a result, the company lowered its fourth-quarter revenue expectations to $9 million from $14 million. It dropped its projections for net income to a loss of 10 to 12 cents per share, before the restructuring charges, compared with the loss of 2 to 3 cents per share expected only a few weeks earlier.