OpenText Reports Restructuring to Support Cloud Growth, Drive Operation Efficiencies

The Company announced that it is initiating a restructuring program in conjunction with organizational changes to support its Cloud strategy and drive further operational efficiencies. Barrenechea said, "Effective immediately, we are announcing a simplification of our business structure around Enterprise, Information Exchange (iX) and Analytics, as well as a new Global Technical Services organization. This structure will allow us to scale as we continue to acquire complementary businesses over time, and will provide additional focus on winning the customer and capturing the lifetime value of that relationship. As a result of the restructuring, we expect to save approximately $50 million in annualized operating expense, accretive to Fiscal Year 2016 earnings and with little to no impact on revenues." The restructuring program costs are primarily related to employee severance arrangements and facility expenses, and are expected to result in a pre-tax restructuring charge of approximately $25 million, total cash payments in the same amount, and a reduction in the Company's workforce by approximately 5 percent. The Company expects these charges to be incurred, and the costs to be paid out, substantially in the First Quarter Fiscal Year 2016. This restructuring reflects OpenText's commitment to delivering superior shareholder value, with a focus on operating margin and earnings versus pursuing unprofitable revenue growth.