Softchoice Announces Cost-Reduction Initiative

Softchoice Corp. (TSX: SO), a North American provider of technology solutions and services, has made a series of cost-reduction initiatives following an extensive analysis of the Company’s existing operating structure, acquisition integration efforts, and efficiencies. Softchoice is accelerating its efforts to enhance productivity for today’s challenging economic environment and to position itself for continued growth.

"We have made tremendous progress integrating our recent acquisitions, however, the effects of the rapid economic downturn make it essential we move decisively to streamline our workforce to drive greater operational efficiency and more fully capture the synergies available to us," said David MacDonald, President and CEO of Softchoice. "Our acquisitions have given significant growth potential by increasing our reach among larger, enterprise organizations and allowing us to enhance our value through the design and implementation of end-to-end technology solutions. The changes we’ve announced will allow us to achieve profitable growth by realigning our internal operations in support of customers and the continued execution of our strategy - both during this period of economic uncertainty and beyond."

As part of these initiatives, Softchoice is realigning its technical resources and leveraging its recent acquisitions to drive stronger solutions delivery capabilities for customers across North America. This process includes removing redundant management structures that were a consequence of integrating the acquisitions made over the past year.

The operating expense savings include both non-workforce related items as well as staff reductions. Approximately 6.5 percent of the company’s workforce is affected by the organizational realignment. The Company is providing severance and career transition assistance to the employees directly affected by these changes. As a result of the actions announced today, Softchoice expects to generate operating expenses savings of approximately US$8 million on an annualized basis.

"It is not easy to see our valued colleagues leave the Company. We want to express our deep appreciation for their contributions and to wish them well in the future," added Mr. MacDonald. "It is also important to state that we remain focused on ensuring our customers receive the best service in the industry. This includes accelerating the roll-out of our value-added solutions and professional services capabilities across the United States and Canada."

Softchoice will incur charges of approximately US$2 million in the fourth quarter of 2008, primarily associated with personnel-related severance costs. Further information concerning savings, costs and business outlook will be provided with the upcoming quarterly earnings release and investor conference call. Softchoice will announce its third quarter results at the close of business on November 4th, 2008.

 [October 22, 2008]

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