Expect Plenty of Layoffs Due to Downturn

In an email from FaceTime President and CEO Kailash Ambwani earlier this month, the company announced a mass layoff in an effort to reduce operating expenses by 30%. In the letter, Ambwani indicated that the company’s revenues depend primarily on the financial sector, and suggested that year-over-year revenue growth into next year would be flat at best.

Symantec also recently laid off its entire global archiving sales and technical overlay team for its Enterprise Vault family of products. Apparently this is part of Symantec’s solution reaching critical mass in overall sales, and being moved to the general sales force. However, perhaps the state of the economy plays a factor. Symantec CFO James Beer announced mass layoffs back on October 30 to trim 4.5% off the cost of its workforce.

In short, recessionary times translate to reduced revenues for many businesses. That means they have to cut costs, and that translates to less spending on technology.

Presumably these layoffs are just the tip of the iceberg, and similar cuts are likely to continue through 2009 and into 2010, particularly among vendors heavily dependent on the financial sector.

David Ferris

One Comment

  1. Surprised
    Posted November 26, 2008 at 12:57 PM | Permalink

    “Symantec also recently laid off its entire global archiving sales and technical overlay team for its Enterprise Vault family of products”

    Really? Thats strange as I am still employed and I fall squarley into the above category along with the hundreds of other colleagues who continue to work on EV day in and day out – total and utter rubbish my friend!!

  2. Posted November 26, 2008 at 2:01 PM | Permalink

    @”Surprised”: could you let us know who you are and what your role is — whether you’re part of the old “dedicated” EV team or part of the “main” Symantec sales force. This would help us give more weight to your feedback. Registering with your symantec.com email address would be ideal, also.

    More generally, if Symantec wishes to assert that we are incorrect about layoffs, it would be best for a Symantec employee to identify themself and their role clearly, and then state the way in which we’re incorrect. For lack of that, some might suspect that the lady doth protest too much.
    [edited for clarity Nov 27]

  3. Daniel Maiworm
    Posted November 27, 2008 at 4:12 PM | Permalink

    Hi David,

    I just checked with a few insiders at Symantec:

    Sales specialists for Archiving in the US have mainly been moved into the general Sales teams, as the market has matured while EV is increasing its market share over the closest competitors (see Gartner for details). Some open reqs have been closed and a small number of people has left. Overall not really a big deal…
    The decision was simply to reduce the number of people in any customer meeting from 3-4 down to 2: The account manager and a “mail-savvy ” SE, saving resources and travel costs.

    EV 8.0 at the same time makes it much easier to do POCs, something SYMC will probably promote more in the future. They ultimately want customers to try out the product themselves, pretty much the same way Microsoft pushes their stuff into the market.

    No layoffs in neither the PM or Engineering teams in the UK nor in the specialist sales force in Europe, where the e-Discovery market has still to take off.

    So from what I have heard so far, the reductions in the EV area are less than in many other business units.

    HTH

    Daniel

  4. dferris
    Posted November 28, 2008 at 4:41 AM | Permalink

    Daniel,

    Many thanks for the input. We had a call yesterday from Symantec analyst relations, asserting emphatically that we’re wrong about the layoff. The representative noted at several points that unless we remove this posting, our relationship with and reputation within the company is likely to suffer. For example, we were told that access to COO/CEO Enrique Salem would be hindered. We would certainly regret that, because we have a high regard for the people, products and services of this highly successful business.

    We invited Symantec to respond with a short statement from a qualified non-anonymous spokesman, which we will then publish along with this posting. Symantec is, after all, in a position to answer the question definitively, whereas others may be providing hearsay or inconclusive material.

    If and when we confirm we’ve goofed, we’ll of course issue an apology and correction. We do goof sometimes, although in this case I still believe our sources are reliable.

    Follow this thread to view the response from Symantec. Assuming our assertions are incorrect, and given the active concern at our posting within the company, no doubt we’ll receive this promptly. If we don’t receive such a response, perhaps that suggests we got the picture largely correct.

    –David

  5. mike ghanie
    Posted November 28, 2008 at 6:22 AM | Permalink

    to all,

    I got one question what do you say about messagelab do you expect major layoffs with this merger?

  6. Posted November 28, 2008 at 10:27 AM | Permalink

    Hi Mike!

    I am not with Symantec anymore, but from what I see SYMC has bought Message Labs because their expertise in the SaaS market. Ultimately they bought the product AND the people behind it.

    With every merger I have witnessed from the inside, there are definitely people leaving after the merger, normally Sales, Marketing and Admin are significantly reduced within the first year.
    At the same time they try hard to retain the technical expertise and rather to further invest in that sector. That has not always worked perfectly well, but the Veritas part of the company learned their fair share through the Precise Acquisition and Symantec had a hard time with e.g. On Technology. Looking back I wiould say these were examples where the joint company learned how not to do it. They did much better afterwards with KVS or Vontu and should be able to apply the strategy to ML as well.

    So while I can’t speak for SYMC/Messagelabs being an outsider now, I have a feeling that maybe the additional investment, that would have been done in a better economic climate will be scaled back, but I have no indications that the MessageLabs business will suffer in any way. Another reason is that MessageLabs is based in the UK, where employees tend to stick longer with their employer as lets say people at start-ups in the Valley… So lets see how the IT industry as a whole will manage to cope with the crisis: Maybe SaaS will be even faster adopted … who knows?

    Regards

    Daniel

  7. Posted December 16, 2008 at 6:18 AM | Permalink

    … just to support my post about the impact on the EV team:

    Here is a statement from the EV Team inside Symantec:
    https://forums.symantec.com/syment/blog/article?message.uid=370405

    Regards

    Daniel

  8. Posted December 16, 2008 at 6:44 AM | Permalink

    @Daniel: Interestingly, I too read that Symantec blog post, but to me it only confirmed what David was saying — that there are no longer any dedicated sales and pre-sales staff for EV.

    Mind you, I don’t think anyone should be surprised that that this is the case — arguably Symantec wouldn’t be operating in the best interests of its shareholders if it didn’t merge the dedicated sales function into its regular teams. It should be doing this ASAP after an acquisition, all else being equal.

  9. Posted January 9, 2009 at 5:44 AM | Permalink

    We’re in “violent agreement” 😉 – See my post from November 27th …

    No RIFs in Engineering, PM or Support, also the Overlay Sales in Europe are still in place.
    This was just to reassure everyone that it will not have any effect on product quality or EV’s future.

    Daniel

One Trackback

  1. […] Industry analyst David Ferris wrote in a research note today that the security vendor has laid off its Enterprise Vault sales and technical services staff — but the change is not only a cost-cutting maneuver, he said. […]

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