The economy’s woes are spilling over into the software sector, prompting Pitney Bowes MapInfo to lay off 128 full-time workers worldwide.
The North Greenbush demographic map software company announced the layoffs Monday. Approximately 10 percent of the cuts will be at MapInfo’s headquarters in the Rensselaer Polytechnic Institute Technology Park.
The layoffs, which began immediately but will extend over several months, came two years after the Stamford, Conn.-based Pitney Bowes acquired MapInfo for $408 million. The cuts represent 8 percent of MapInfo’s global work force of 1,600.
MapInfo is looking to lower operating expenses by approximately 7 percent through the job cuts and other measures. Mailing and shipping equipment manufacturer Pitney Bowes employs about 450 in North Greenbush, with MapInfo workers accounting for 300 of those workers. Back office, financial and sales staff account for the rest.
“[We] needed to make these changes in order to strengthen the business and address the challenging economic market conditions,” said Mike Hickey, president of MapInfo and Group 1 Software.
Only 13 months ago, Pitney Bowes announced plans to add 50 new workers in North Greenbush and relocate 120 sales and finance workers there from its now-closed Colonie facility. In return for the influx of jobs, Rensselaer County agreed to give Pitney Bowes a 10-year payment in lieu of tax deal — estimated to provide $250,000 in tax savings to the company over the life of the agreement.
“Overall, companies are tightening their belts, just as Pitney Bowes is tightening its belt, and this is a reflection of that,” said Pitney Bowes spokesman Matthew Broder.
Pitney Bowes ended the third quarter with a net income of $98.2 million, down 23.1 percent from the same period of 2007. Its software arm posted a 7 percent increase in revenues, but sales fell flat when excluding the impacts of acquisitions. Pitney Bowes President and Chief Executive Officer Murray Martin last month said customers’ credit concerns contributed to delayed purchases, particularly for big ticket sales in the software and production mail businesses.
“We’ve seen some customers take a pass in license renewals and license expansions,” Broder said.
Many of the business sectors that utilize MapInfo’s market simulation software are among the hardest hit by the nation’s recession. In recent years, the Cleveland-based KeyBank; Glendale, Calif.-based IHOP; and North Andover, Mass.-based Eagle-Tribune Publishing Co. have hired MapInfo to pinpoint areas for new retail branches, restaurants or circulation growth.
In October 2007, Pitney Bowes combined MapInfo with its recently acquired Group 1 Software, the Lanham, Md., software company that standardizes and enhances customer address information. Together, they are known as Pitney Bowes Software.
Hickey said the layoffs “should enable us to be better positioned for rapid growth when the economy begins to recover.” The affected MapInfo employees will be provided with severance packages and outplacement services.
Robert Pasinella, the director of Rensselaer County’s Industrial Development Agency, said he did not have all the details about the MapInfo layoffs and was not certain whether they violate last year’s PILOT agreement. He said the county will monitor the situation but does not plan to implement any immediate punitive measures if they do violate the PILOT, given the economic environment.
“We don’t want to kick someone while they’re down,” said Pasinella.