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O.C.'s MAI Systems to Fire 80 Workers, Refocus on Software


IRVINE — Marking its third change in corporate direction, MAI Systems Corp. announced Friday it will fire 80 people to restructure its business and cut costs.

The company, which develops software for the hospitality industry, employs nearly 500 people worldwide. About 185 employees are based in Irvine.

The layoffs will affect all the company's U.S. locations, but most will come out of the firm's headquarters in Irvine, said George G. Bayz, MAI president and chief executive.

The company said it will take a $900,000 restructuring charge in the third quarter to cover severance and other costs related to the layoffs.

The stock rose 13 cents Friday to close at $3.38 a share on the American Stock Exchange.

MAI Systems estimates that these staffing cutbacks, along with eliminating 24 sales and support positions in the system integration division in May, will trim the company's payroll expense by about 37%.

"These are very painful reductions, but we have to be refocused on the software arena," Bayz said.

MAI plans to get out of hardware maintenance to concentrate on software and related services. The firm's principal clients are large hotel resort chains, gaming casinos and mid-size manufacturers.

MAI staff said they hope to expand, particularly in manufacturing, attracting new clients from the food, beverage and pharmaceutical industries.

The company lost $2.1 million in the second quarter. MAI posted net income of $9.5 million for the same time period last year, but that included $7.3 million from a legal settlement. Revenue rose 23% to $18.4 million from $15 million last year.

MAI has a turbulent history. Controversial Miami financier Bennett S. LeBow acquired MAI Systems' predecessor, Basic Four, through an investment partnership in 1985. He tried unsuccessfully to take over Massachusetts-based Prime Computer, which was three times MAI's size.

After that, LeBow pushed MAI to become a high-flying computer maker with 4,000 employees. But after years of financial troubles and hundreds of layoffs, the company declared bankruptcy in 1993.

It emerged late that year as a profitable, much smaller software publisher and computer maintenance company. LeBow remained chairman until 1995. He sold his remaining stake in the company last January.


Red Tide

Three consecutive quarters of losses, amounting to $28.5 million, prompted MAI Systems Corp. to reduce its work force. A look at the company and its financial picture:

MAI Systems Corp. at a Glance

Headquarters: Irvine

President/CEO: George G. Bayz

Business: Information technology

Employees: About 500 (185 in Irvine)

Status: Public

Exchange: AMEX

52-week high: $8.81 (Oct. 1, 1996)

52-week low: $2.94 (Aug. 20, 1997)

Friday's closing price: $3.38

Sales (millions)

(bar graph)

Net Income (millions)

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Source: Bloomberg News; Researched by JANICE L. JONES / Los Angeles Times

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