Symantec to Cut 10% of Staff as It Reorganizes Business
(Bloomberg) — Symantec Corp., the biggest maker of cyber-security software, said it’s cutting about 10 percent of its workforce as it reorganizes its business.
The company also said profit excluding some costs in the fiscal first quarter will be 24 cents to 26 cents a share on sales of $865 million to $895 million, Symantec said in a statement Thursday. That was mostly in line with the average analyst projection of 24 cents a share in profit on $876.2 million in revenue, according to data compiled by Bloomberg. Those predictions were reduced last month when Symantec cut fourth-quarter forecasts.
Mountain View, California-based Symantec is navigating a major transition as it tries to recapture momentum in the fast-growing market for protecting against computer hackers. The company is seeking a replacement for Michael Brown, who in a year and a half as chief executive officer oversaw a large-scale reorganization, led by his January sale of Symantec’s Veritas data-storage division for $7.4 billion to Carlyle Group LP.
In addition to the employee cuts, Symantec said it expects to close some facilities and will incur costs of $230 million to $280 million related to the restructuring. The company, which declined to disclose the number of jobs to be eliminated, has more than 11,000 employees, according to its website. The moves should result in a total reduction in annual spending of about $400 million.
Symantec shares slipped 0.6 percent in extended trading to $16.80. They had gained 1.1 percent to $16.90 at the close in New York, and have tumbled 20 percent so far this year.
The company is now focused solely on cyber-security, an industry the company helped pioneer with its Norton antivirus product but where it has fallen behind nimbler rivals such as Palo Alto Networks Inc. and FireEye Inc.
Security experts have praised Symantec’s enormous reach — the company’s software protects more than 175 million computers around the world — and new technologies for detecting advanced threats. But the company’s challenge is convincing customers it has evolved beyond its antivirus roots. Gartner Inc. projects worldwide sales of cyber-security technologies will surpass $83.6 billion this year, an increase of 8 percent over 2015.
In its April 28 reorganization announcement, the company said it was creating a new Office of the President, and named Ajei Gopal to interim president during a search for a permanent CEO. Gopal is an operating partner at Silver Lake Management LLC, which invested $500 million in Symantec in February, in what was widely seen as a move to boost shareholders’ confidence by bringing on a respected technology investment firm as an adviser, and giving it a seat on the board.
Brown will continue in his role as CEO until a successor is found. Symantec executives have said they are looking for someone with experience running a cyber-security company or in selling software as a service. Brown’s major accomplishment was arranging a sale of Veritas that investors were long calling for but which his predecessors dismissed as too complex.
In the fiscal fourth quarter, which ended April 1, Symantec said adjusted profit was 22 a share on sales of $873 million, as the company estimated last month.