SkillSoft restructuring will see 120 jobs go at cost of $15m

SkillSoft will offer its Irish staff a redundancy payment of between four and six weeks pay per year of service as it cuts its workforce by about 120 people.

The company expects to spend up to $15 million (€11.27 million) on restructuring charges, which will cover redundancy payments in Dublin and another 13 job losses in the US. It will also have to pay back grants received from Enterprise Ireland by SmartForce, the Irish firm that SkillSoft acquired during 2002.

Skillsoft, which is based in the US and develops online training courses for firms, confirmed yesterday that it was restructuring its global operations to cut operating costs. This reorganisation will see the firm outsource the development of most of its e-learning content in an effort to target $5 million annual savings.

SkillSoft said this decision was arrived at following a full review of the cost structures of the firm.

This review is likely to have taken into consideration the rapid fall in value of the dollar against the euro, a move which makes it more expensive for US firms to maintain staff in Ireland.

The 120 job losses at SkillSoft's Dublin headquarters will almost all be in the firm's content development division. The remaining 60 people who work in software development will not initially be affected by the reorganisation.

An internal company email sent to staff shows that SkillSoft will offer people working at the firm for longer than two years a redundancy package of six weeks per year of service. Staff working at the firm longer than a year but less than two years will get four weeks pay per year of service.

Redundancy payments will be capped at 54 weeks basic pay.Staff have until December 7th to apply for the package.

Enterprise Ireland confirmed yesterday that it would be seeking the repayment of employment grants paid to SmartForce worth just under €1 million.

Meanwhile, SkillSoft shares lost more than 20 per cent of their value yesterday when they opened for trading on the Nasdaq following a profit warning issued on Wednesday. The company warned in its third quarter results announcement that competitive pressures had delayed the renewal on software sales. It also warned that full year results will not meet expectations.

SkillSoft shares closed down 16.9 per cent at $6 last night following the profit warning.