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Irvine Software Firm to Lay Off 80 in Restructuring

Computers: MAI Systems says staffing cuts will be made at all of its U.S. sites, but most will come from its O.C. headquarters.


Marking its third change in corporate direction, MAI Systems Corp. announced Friday that 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 of the company's U.S. locations, but most will come out of the firm's headquarters in Irvine, said MAI President and Chief Executive George Bayz.

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

The stock rose 13 cents Friday to close at $3.38 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 altogether to concentrate on software and related services.

The firm's principal clients are large hotel resort chains, gaming casinos and mid-size manufacturers. MAI said it hopes to expand, particularly in manufacturing, and attract new clients from the food, beverage and pharmaceutical industries.

The firm lost $2.1 million in the second quarter ended June 30. MAI posted net income of $9.5 million for the same period last year, but that included $7.3 million from a legal settlement. Revenue rose 23% to $18.4 million from $15 million.

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.

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