Analysts say that up to 450 Baltimore Technologies staff could face enforced redundancy after interim results later today, as the company takes drastic measures to ensure its survival. While this may involve Baltimore's withdrawal from a number of locations abroad, it has also been suggested that the company may consider selling off parts of its business in order to simultaneously save money and raise additional operating revenue. An outright acquisition is still unlikely in the short term however, according to the analysts.

Baltimore has already shed 250 staff this year, reducing its headcount by almost 20 per cent. The additional cuts expected today represent a desperate attempt at shoring up the company's remaining cash reserves, estimated to stand at little more than £50 million sterling (€79 million). Analysts have said that without fundamental cost-cutting measures, this sum would only fund Baltimore's survival into the first quarter of next year.

Formerly one of the Republic's star technology players, Baltimore has been struggling to bring itself out of the doldrums since March when it announced its first profit warning. According to Mr John Coolican of Merrion Stockbrokers, the company now finds itself in a "catch 22" situation where it must cut costs to survive but in doing so will reduce investor and customer confidence, both of which are crucial to the company's long-term success.

"Cost cutting is one thing, but you've got to grow on the top line as well, said Mr Coolican yesterday. "Cutting for cutting's sake is not the answer.

Davy analyst Mr Barry Dixon estimates that the optimal headcount for Baltimore is around 800, but agrees that staff cuts are only the first step in bringing Baltimore back to health. The work must then begin on convincing existing staff to remain with the company, he said, suggesting that new stock option schemes may be introduced. Both commentators believe that Baltimore's core PKI security infrastructure is a sound product that will ultimately lead to the company being acquired, but concede that this is unlikely to happen until the results of considerable belt-tightening become evident.

"Someone will buy this company at some point," said Mr Dixon, "but no-one's going to look at it until the restructuring is complete."

Baltimore stock closed at 22.25p sterling in London last night, down 3 per cent on the day.