More layoffs hit Baan after takeover

Close to 800 of the approximately 2,800 jobs at Baan are being cut after two private equity groups acquired the Dutch enterprise application vendor in June, leading to fear among some users that Baan may lose valuable expertise.

Many of the layoffs have already been made, but employees in Baan’s home country are among the last to hear how the takeover affects them. Between 240 and 250 of the approximately 850 Baan employees in the Netherlands are expected to be laid off on Friday, a source familiar with the company’s plans said. Baan President Graeme Cooksley gave the same numbers in an interview with the Dutch magazine FEM Business.

Baan officials were unable to provide comment for this story.

Cerberus Capital Management LLP and General Atlantic Partners LLC bought Baan from Invensys PLC on June 3 for $135 million in cash. The two investors are merging Baan with SSA Global Technologies, a business application vendor.

The cuts at Baan follow a restructuring at the company last year. Also in the wake of the takeover, several senior executives have left the company, including Baan President Laurens van der Tang, who has been replaced by Cooksley, a former executive vice president at SSA.

Heath Tipton, business process development manager at Baan customer Avery Berkel Ltd. and chairman of the U.K. and Ireland Baan user group, said users are counting on SSA to make sure the cuts do not affect Baan customers.

“We have seen fairly aggressive actions in terms of headcount and cost reduction. The commercial reasons for these actions are understood. However, as customers with contractual support agreements we expect there to be no tangible impact on the quality and value of Baan’s customer support following reductions of Baan staff,” he said in an e-mail message.

“Hopefully the cuts are the first of two stages; the second stage being the true consolidation and subsequent growth of the Baan product set within SSA,” Tipton said.

Avery Berkel, a Birmingham, England, maker of scales and food processing equipment, uses Baan 4c ERP software across its business for tasks including finance, logistics, servicing and engineering, Tipton said. The company is looking at product lifecycle management products. Baan has a product, but Avery Berkel is not sure yet whether it should buy the Baan product or look elsewhere.

“Clearly SSA has some way to go to complete their consolidation plans,” Tipton said.

Invensys bought Baan in August 2000 for about €700 million ($708 million at that time). At the time, the engineering company was seen as Baan’s savior, reviving the software company after an accounting scandal involving false sales records in the late 1990s. However, Invensys saw itself forced to sell loss-making Baan in an effort to spur growth and reduce its debt.