Symantec follows tech trend and announces layoffs
Key reasons that led to Symantec's breakup (Part 9 of 9)
Symantec announces layoffs after split
In its 2Q15 earnings results, Symantec Corporation (SYMC) announced headcount reductions of nearly 10%, or 2,000 employees. The company stated that the layoffs are part of the company’s restructuring process. The restructuring news comes ahead of the company’s plans to split into the following two companies: security and document storage. The split is expected to cost $220 million in separation costs and restructuring expenses.
Symantec resorted to layoffs as part of its restructuring strategy called Symantec 4.0, as shown in the chart below. The company announced this strategy to simplify and transition Symantec’s device-centric approach to digital information security and management space. The split is expected to be completed by the end of 2015.
If Symantec posts good results, PowerShares QQQ Trust ETF (QQQ) is expected to benefit since it has significant exposure to Symantec.
Tech players seek layoff plans to reduce costs
In 2013, Symantec announced a major layoff and cut roughly 1,700 jobs. According to the San Jose Mercury News, Symantec was the tenth-largest technology employer in 2013. As of March 2014, Symantec had 20,800 employees.
In 2014, various technology players announced splits as well as layoffs. In May 2014, Hewlett-Packard (HPQ), Intel (INTC), and Cisco (CSCO) announced 11,000, 5,000, and 6,000 job cuts, respectively.
Symantec will channel savings to R&D and high-growth areas
Symantec (SYMC) intends to reinvest its savings from the layoffs into research and development (or R&D) programs. The programs will focus on mobile, data loss prevention (or DLP), advanced threat protection (or ATP), backup, and backup appliance products.
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