Mountain View, California-based Symantec Corporation, the world’s leading cybersecurity company, has announced it will restructure and reduce its workforce by as much as 8 percent. Symantec had approximately 11,800 employees in December 2017 and an 8 percent reduction would appear to be up to 944 employees. In a recent conference call, Symantec’s CFO Nicholas Noviello said that the company plans to record $50 in restructuring costs associated with the reduction-in-force.
One can only wonder if the changes are being driven by an activist investor, in this case, New York-based hedge fund Starboard Value, LP whose current position is 5.8% of Symantec. The hedge fund is demanding operational improvements to unlock shareholder value and seeking to replace five board members. They claim that the new board members can help Symantec resolve accounting discrepancies brought to light by an employee.
It appears that a Symantec employee has lodged credible allegations regarding Symantec’s historical financial records. The company has notified the Securities and Exchange Commission engaged an independent law firm to investigate. Already the vultures are flocking as one law firm is advertising for Symantec shareholders and has said it was “preparing a class action lawsuit to recover losses suffered by Symantec investors.”
It appears that Symantec’s core business of supplying anti-virus software to companies and individuals may take a significant hit when users switch to cloud-based solutions where the anti-virus and anti-malware is the responsibility of the service provider and the user’s only interaction with the cloud is with a relatively safe and secure browser.
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