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Scient restructures operations to better align with market demand; revises March quarter expectations

San Francisco (ots-PRNewswire) -

Investor conference call scheduled for today to review outlook
Scient (Nasdaq: SCNT), the
eBusiness Systems Innovator(TM), is lowering its revenue and earnings
expectations for its fourth fiscal quarter ending March 31, 2001, and
announced plans to eliminate 675 positions in the June quarter. In
addition, Scient announced that, depending on the impact of near-term
business conditions, it may eliminate approximately 175 additional
positions over the next several months.
Scient will be holding a conference call to review fiscal fourth
quarter expectations at 4:30 p.m. EDT/ 1:30 p.m. PDT today, April 11,
2001.  To participate in the conference call within the U.S., please
dial 800-289-0518 approximately ten minutes prior to the call.
International callers should dial 913-981-5532. The passcode for the
call is 543469.  The call is also available through webcast at
Commenting on the market, Bob Howe, Chairman and CEO of Scient,
stated, "The economic environment remains extremely challenging.  Our
large enterprise clients continue to delay IT spending initiatives
which has resulted in further deterioration in our pipeline. At this
juncture, we believe the weakness in IT spending trends may extend
well beyond the next quarter or two, further limiting our visibility,
and we may experience negative revenue growth in the next several
quarters if such trends continue. As a result, we have made a very
difficult, yet necessary, decision to take workforce reductions and
downsize our geographic footprint to further align our cost structure
with market demand."
Mr. Howe also stated, "We are striving to reinvent our business by
evolving our service offering for enterprise clients and have had
early success in selling our high value, high impact offerings. We
also have developed a more cost-effective integrated approach through
our Engineering Acceleration Centre which enables us to be more
competitive on pricing.  These offerings combined with our action to
better align our capacity with the current demand outlook should
provide us greater flexibility in our reinvention process."
Scient's revenues for the March quarter are now estimated to be
approximately $27 million.  Professional services costs are projected
to total approximately $26 million. As a result of this revised
outlook, Scient is projecting a pro-forma operating loss of
approximately $32 million and a pro-forma loss of approximately $0.39
per share (not tax-affected). The company estimates that its cash
position at the end of the March quarter was approximately $160
Scient expects to record a total restructuring charge of
approximately $95 million to $110 million.  An estimated $60 million
to $65 million of the total should be recorded in the March quarter
to cover surplus real estate and other IT-related assets. The
restructuring charge estimated for the June quarter is $35 million to
$45 million to cover severance, and office related closing costs. The
cash portion of the restructuring charge is expected to be $58
million to $68 million.  As a result of this restructuring, Scient
expects to achieve annual cost savings of approximately $175 million.
In order to more closely align to market demand, Scient expects to
significantly downsize and modify its geographic footprint and move
its corporate headquarters to New York from San Francisco. Included
in this plan, Scient will be closing its Los Angeles and New Jersey
offices and reducing its San Francisco, Boston, and Chicago locations
to smaller sales offices. Scient will be reviewing several other
offices to determine appropriate actions, including possible closing
or downsizing as market conditions warrant.
Bill Kurtz, executive vice president and CFO noted, "Our balance
sheet remains strong as we estimate that our cash balance was
approximately $160 million at the end of March. Post restructuring,
we believe our cash balance will approximate $100 million at the end
of June. We believe that the restructuring actions we are taking
should significantly reduce our fixed costs and accelerate our return
to profitability." Given the current market conditions and lack of
visibility, Scient does not plan to provide guidance on its near term
financial outlook.
A replay of the April 11th call will be available through April
18, 2001. Access to the replay is as follows:
United States:           +1 888-203-1112; Passcode:  543463      
Outside United States:   +1 719-457-0820; Passcode:  543463
About Scient(R):  Innovate -- For What's Next(TM)
Led by veterans with experience in both eBusiness and key vertical
industries, Scient uses eBusiness as a catalyst to help clients
unlock the value in their enterprises. Scient's process leverages
expertise in technology, strategy, and customer experience to help
clients create new sources of revenue and eliminate cost. In
addition, Scient works with clients to increase their organisation's
abilities to anticipate and capitalise on changes in their business
environment. Scient can be reached at http:// or +1
Special note regarding forward-looking statements
Some of the statements in this press release constitute
forward-looking statements. These statements involve known and
unknown risks, uncertainties and other factors that may cause our or
our industry's actual results, levels of activity, performance or
achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied
by such forward-looking statements. Forward-looking statements relate
to future events or our future financial performance.  In some cases,
you can identify forward-looking statements by terminology such as
"may," "will," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential" or "continue" or the
negative of such terms or other comparable terminology. These
statements include but are not limited to statements regarding the
scope and nature of Scient's expected restructuring activities and
the anticipated impact of those activities, the nature and size of
the market for our services and the corresponding client demand, and
our expectations regarding the future success of the business, future
revenues, losses, profitability, cash position, restructuring
charges, and other operating and financial results. These statements
are only projections. Actual events or results may differ materially.
 Factors that could cause or contribute to such differences include
but are not limited to, the timing and size of client demand for
Scient's services; the potential loss of or delay by major clients;
Scient's ability to develop successful relationships with partners
and other third parties; the size and development of the global
market for our services; our ability to accurately price our projects
and to meet client expectations; our ability to manage and expand
international operations; our ability to predict and offer responsive
services to meet market demand; the highly competitive market in
which we operate; our ability to obtain new clients and to retain
existing clients over the long-term; the efficiency and success of
our accounts receivable efforts; the accuracy of our internal
reporting and management systems; our ability to attract, train and
retain qualified personnel; our reliance on a limited number of
clients and our lack of long-term contracts; and the development and
sustainability of a market for Scient's services. This list should
not be considered inclusive of all risk factors. In evaluating these
statements, you should specifically consider various factors,
including the risks factors listed in our Form 10-Q for the period
ended December 31, 2000 filed with the Securities and Exchange
Commission.  These factors may cause our actual results to differ
materially from any forward-looking statement.


Theresa A. Matacia, CFA
Phone +1 415-498-3936, e-mail:;
Media: Bronwyn Wormell
Phone +1 415-498-3879, e-mail:, both of Scient