Utility software maker Symantec will lay off about 100 employees, most likely during its fiscal 1999 third quarter, as a result of sluggish summer sales, the company confirmed today.
"We're aggressively working to reduce our costs in the face of a weak retail environment," said Amy Savage, director of corporate communications for the company.
Savage said the cutbacks would be "across the board" and would affect "approximately 100 people" or roughly 5 percent of the company's workforce. Symantec has nearly 2,500 employees.
"Sales have been soft for a couple months, and that has an effect," she said. "We're trying to get expenses in line with revenues."
The software market in general has been down this summer, analysts said, due in large part to the release of Microsoft's Windows 98 operating system. The OS upgrade was met with stronger-than-expected sales.
"Retail has been difficult through the summer. During the months of July and August Microsoft has taken dollar share," said Rob Owens, a senior analyst at Pacific Crest Securities. "If the consumer goes into CompUSA with $100 in their pocket, and Windows 98 [an entire operating system] costs $90 and Norton Utilities costs $60, guess where [the money is] going?"
Indeed, Windows 98 was the top selling software product in August, according to PC Data. Symantec's Norton AntiVirus 4.0 came in at No. 8.
But Owens said Symantec's revenues have been strong through the June Quarter, and he described the workforce cuts as minimal.
"Overall, the company has managed their business well," he said.
Symantec is slated to release its fiscal 1999 second-quarter earnings on October 15. Wall Street expects the company to post earnings of 37 cents a share, according to First Call.
The company has said it could lose up to $5 million in revenues in the September fiscal quarter due to its compliance with a temporary restraining order issued in a copyright infringement lawsuit brought by rival CyberMedia.
Meanwhile, Symantec announced Monday that it would buy Intel's antivirus business and license the company's chip technology for corporate antivirus products. (Intel is an investor in CNET: The Computer Network, publisher of News.com.)
The layoffs are not related to either the Intel deal nor the CyberMedia lawsuit, Savage said. Symantec's stock took a downturn recently on news of the CyberMedia suit, but yesterday got a bump--about 7 percent--after the announcement of the Intel agreement.
Stock in the company closed the day down 1.125 or more than 8 percent at 12.0625 in midday trading today. The shares have traded as high as 32.625 and as low as 12.75 during the past 52 weeks.