Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Steven M. Ashley – Robert W. Baird & Co.
Steven M. Ashley – Robert W. Baird & Co.
Maybe I could start with a couple questions, Ray, around the guidance. The midpoint of the guidance calls for revenue to be down 5% year-over-year. How much of that year-over-year decline is currency and would you be looking for a decline ex currency or maybe you could talk about revenue growth expectations ex currency in the fourth quarter?
Raymond H. Panza
Steve, as I’m sure you’re aware, nobody would have expected the Euro to be where it is today or the Pound to be where it is today. We certainly expected a strengthening dollar but this morning you’re looking at a Euro in the 126 to 127 range. You’re looking at a Pound under 160 and everything I’m reading indicates that that’s going to continue to drop. So you’re 100% correct.
We expect significant impact on our 2008 revenue driving down our revenue because of the currency challenges. So that was the primary factor. It is a difficult economic environment from a sales standpoint but I think as we’ve demonstrated now this past quarter we can continue to put up fairly solid numbers from a revenue perspective. We’re substituting the larger deals with smaller deals but I don’t want to take anything away from the global economy.
Steven M. Ashley – Robert W. Baird & Co.
Dos your currency assumptions apparent in your guidance, are they lower than where the Euro and Pound relationships stand today?
Raymond H. Panza
I’m expecting continued challenges from currency, yes.
Steven M. Ashley – Robert W. Baird & Co.
In terms of the cost savings $10 million a year, $2.5 million a quarter, how much of that savings if any will we see in the fourth quarter and is embedded in guidance?
Raymond H. Panza
Virtually none.
Operator
Your next question comes from Nathan Schneiderman – Roth Capital Partners.
Nathan Schneiderman – Roth Capital Partners
A handful of questions for you, first of all I was hoping you could talk about the decision to cut headcount 10% in a little more detail. What specifically are you seeing out there that’s driven you to make such a big adjustment to your headcount?
Jack Noonan
It’s an absolute unknown and the worst thing you can do within an organization is continue to trickle a reduction or cost cutting out. You get it over with, get it done and move forward and it’d be great if we cut too far and had to hire tomorrow, but I don’t see it on the horizon.
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