SkillSoft chief executive warns staff jobs will be cut following merger

Skillsoft chief executive, Mr Chuck Moran, warned former SmartForce employees in Dublin yesterday that mandatory redundancies would be imposed following its merger with SkillSoft.

Mr Moran, who was speaking to Irish staff for the first time since the US e-learning firm merged with SmartForce, said more details about the number of redundancies would be outlined in a month.

SmartForce laid off 500 staff worldwide this year, following a damaging profit warning in April that led to its merger with SkillSoft. Dublin escaped the majority of the cuts at that time, losing 80 staff. Mr Moran said a pre-merger review of both companies had not been possible due to Securities and Exchange Commission regulations but job duplication was now being reviewed.

Mr Moran, who was previously president and chief executive of SkillSoft, said the firm was committed to the Republic. Dublin would remain the company's corporate headquarters and its main R&D centre, he told staff.

A SkillSoft spokeswoman said Mr Moran had reiterated that the firm would remain content driven in the future. Voluntary redundancy would also be offered to staff, she said. It is understood that staff have until next Wednesday to apply for voluntary redundancy under the same terms as offered to staff earlier this year. At that time staff received six weeks' pay for each year of service at the firm.

A note in SmartForce's merger prospectus suggests SkillSoft's commitment to its Dublin operations is probably influenced by the lower corporate tax rate in the Republic, compared to the US.

It says the combined firm will have to "reorganise SkillSoft's operations and repatriate certain assets to Ireland in order to maintain a combined company-effective tax rate at the level currently applicable to SmartForce".

The prospectus details several lawsuits which are pending against the merged company. NETg, a US-based e-learning firm which also has operations in the Republic, is suing SkillSoft for $400 million (€408 million) in damages for alleged theft of trade secrets. The firm also filed a suit against SkillSoft in July 2000 alleging that its educational and training software infringe a patent owned by NETg. These lawsuits have already cost SkillSoft $5 million in fees.

SmartForce is the subject of several legal suits including a patent infringement suit taken by US firm IP Learn and a suit for damages taken by Lionet, a firm based in the Republic, for alleged breaches in software licensing conditions.