Netscape's new Irish operation, which is scheduled to hire 300 workers by the year 2000, could suffer in a worldwide programme of cutbacks announced by the company yesterday.
Netscape, manufacturers of the worlds' most popular Internet browser programme, already employs around 50 people at its Dublin facility.
A spokeswoman for the firm in Paris said yesterday that executives had begun an analysis of European operations, including those in Ireland, but had not yet made any decisions. No Dublinbased executive was willing to speak to reporters.
However, sources within the company said that because of the importance to Netscape of the tasks performed in Dublin, it was possible that the facility would remain untouched. Irish workers perform "localisation" of Netscape's programmes, re-working them to suit a large number of different languages and markets. Netscape regards the site as its European software development and operations centre.
Meanwhile, industry sources said that because the decision to move into Dublin was so recent - it was announced just three months ago - the facility would be seen within the firm as part of the solution to its current difficulties, rather than part of the problem.
Yesterday, Netscape warned of a fourth-quarter loss of up to $89 million (£60 million), and said it would close some operations and cut jobs to help it focus on software development, but did not specify the number of layoffs it believed were necessary. The company said the poor results stemmed from unexpectedly slow growth.
Netscape said its growth was held down by competitive pressures, slower-than-expected development of new products and Asia's economic slump.
Nonetheless, the firm said it expected to report revenues for the quarter ending December 31st in the range of $125 million to $130 million, an increase of 9 to 13 per cent growth over revenue of $115 million in the fourth quarter of 1996.
Netscape said the fourth-quarter loss will include $35 million to account for the restructuring and $52 million in charges related to its acquisition of Actra Corporation and Kiva Software.
"We plan to streamline our business to focus on key enterprise market opportunities and eliminate unrelated expenses," Netscape's president, Mr Jim Barksdale, said in a statement.
Wall Street analysts immediately downgraded the stock. Morgan Stanley Dean Witter Discover lowered its rating from strong buy to outperform, describing investment in Netscape shares as "highrisk, high-reward".
The Dean Witter analyst also referred to Netscape's only serious rival, Microsoft's Internet Explorer programme, saying that "FUD (industry shorthand for `Fear, Uncertainty and Doubt') has certainly caused poor buyer psychology and free browsers have caused some aggregate pricing pressure".
As Internet use increases, the two companies have been locked in battle for new users. Microsoft is giving away its product free as part of its Windows 95 programme, a practice Netscape says gives the larger company an unfair advantage.
