Symantec Cutting up to 1,700 Jobs as Early as Today
The cuts are part of a company-wide reorganization first announced in January as part of a turnaround plan instituted by Steve Bennett, Symantec’s new CEO, who joined the company 11 months ago.
Bennett, a former CEO at Intuit and a veteran of General Electric, told Reuters in a January interview that the company has too many management layers and would be streamlined into 10 business units.
Ellen Hayes, a Symantech spokeswoman, sent the following statement:
“Symantec is in the midst of a company-wide transformation. As part of this effort, we are engaged in a company-wide reorganization. As a result, some positions are being eliminated. This action is a reflection of our new strategy and organizational simplification initiative announced by Symantec’s executives on Jan. 23rd, 2013. One of the goals of Symantec’s reorganizational effort is to make the company’s employee reporting structure more efficient and support the company strategy moving forward. There are several stages to the reorganization process, as we define executive and management layers down to all levels of employees. Some notifications are happening this month, as part of this the process. We are communicating with employees directly and do not have more information to share at this time.”
The company said in its 10-K annual report, filed with the U.S. Securities and Exchange Commission on May 17, that it plans to take charges related to its reorganization plans amounting to between $220 million and $250 million. Those cuts are to be completed by the end of the company’s 2014 fiscal year, which began March 30. But, as of the end of March, it had taken only $10 million worth of those charges, meaning the biggest reduction in force is yet to come.
People familiar with the company’s operations say job cuts have been under way for several months, but only a relatively small number of people have have been let go so far. One source close to the company said the next round of cuts was to be “the biggest yet.” Some employees had already been told their positions were being eliminated this week.
The cuts are to be carried out in two phases. About 1,000 positions would be eliminated this month, and some affected employees had already been notified as early as Wednesday. Another 700 positions are to be eliminated in July. The combined cuts would amount to about eight percent of Symantec’s 21,500 employees worldwide.
Earlier this year, Bennett complained that most Symantec managers had on average only five people reporting to them. As such, the job cuts are expected to hit the company’s middle-management ranks especially hard. Bennett said in a May 7 conference call with analysts that Symantec would eliminate between 30 percent and 40 percent of its management positions. “We will have fewer, bigger jobs for our best and brightest,” he said at the time. He also said those cuts would be completed by the end of July.
Symantec reported $6.9 billion in sales for the fiscal year ended in March. Its biggest line of business is its storage and server management segment, which accounted for $2.5 billion, or about 36 percent of sales. It is best known for its consumer-facing security software business, which accounted for $2.1 billion in sales. Sales for fiscal 2013 rose by less than three percent year on year while net income rose four percent. Its shares have risen by more than 18 percent this year.
Update: Shareholders are reacting to the news of the layoffs with a nod of approval. As of 12:05 PM Pacific Time, Symantec shares are up by 27 cents or more than one percent to $22.44.