Orchestream cuts more jobs

Orchestream, the internet software firm founded by a 25-year-old entrepreneur, today revealed fresh job losses in an effort to cut costs.

The London-based group said it had cut 89 jobs in the past month, including ten staff in the UK, after seeing sales hit by the US slowdown.

The ‘‘unpredictable timing’’ of closing sales meant it no longer had the same level of confidence in its short-term outlook, it added.

Revenues for the third quarter of the year are now forecast to be £2.3m lower than previously expected at £3.2m.

The majority of the 89 job cuts will take place in North America where Dybands, a subsidiary of Orchestream’s CrossKeys division in Pennsylvania, has been closed following the group’s failure to sell the business.

The recent cuts follow 92 job losses announced on September 4. The company now has a staff of 252.

Orchestream was founded in 1996 by a computer science student at Imperial College London, Charlie Muirhead, and counts many of the big banks among its clients.

Chief executive Ashley Ward remained bullish today, pointing out that the revised revenue estimate for the third quarter was still much higher than for the whole of the last financial year - £2.7m.

Revenues for the first quarter of the current financial year were £2.2m and £4.7m in the second.

Mr Ward also said the job cuts had enabled the firm to reduce monthly operating costs by more than £1m to £2.4m.

Orchestream’s software, described by Mr Muirhead as ‘‘air traffic control for the internet’’ - enables telecom operators and large companies to prioritise information sent via the Internet.

Mr Ward said: ‘‘I remain confident in the medium term outlook for the business.

‘‘Customer interest remains high, but it is clearly harder to predict exactly when prospects will be converted into actual sales, particularly in the US.’’

He said the firm hoped to boost sales in the US, as 85% of their business presently comes from Europe.

Orchestream was floated successfully last year and was seen as one of the few technology firms to defy gravity during the dotcom downturn.

Today, its shares were down 10%, or 2½p at 22½p.