UK Edition
Software group Sage culls 30 executives after missing sales forecasts
Sage's chief executive has dismissed 30 executives in a cull of its senior ranks following a damaging slowdown in sales.
Stephen Kelly, the head of Britain’s biggest software group, announced the changes as part of an overhaul of its sales operation after blaming “inconsistent operational execution” for failing to deliver a predicted increase in growth.
Last month, Sage revealed that sales had grown slower than expected in the six months to the end of March, sending shares down 8pc.
The Newcastle-based accounting software provider blamed slow sales in the UK, one of its biggest markets, on an undertrained and inefficient sales operation, and said it had made changes to remedy this.
This included 30 of the company’s 600 directors and vice presidents leaving the company, which the company said would speed up decision making and simplify the business.
Under Mr Kelly, Sage, has switched from selling individual copies of its payroll and payments software to online versions sold via subscriptions.
Mr Kelly insisted the strategy was working, pointing out that it had led to growth in many of the company’s markets.
“We showed lots of momentum, there are a lot of pointers to validate the strategy,” he said. “These [issues] are very isolated. The pace of that migration has gone more slowly than we would have liked.”
Sage’s half-year profits fell by 5pc to £171m, a drop largely due to financing costs. Revenues grew by 7pc to £899m. Shares rose 0.4pc.
Analysts at Investec said: “The key question is whether this is down to sales execution, or something more fundamental. We believe the management view is clearly the former.”