* Managers will be laid off-CEO
* First dividend to be paid in June quarter
By Jim Finkle
SAN FRANCISCO, Jan 23 Symantec Corp
plans to slash its management ranks and reorganize into 10
business areas, but has decided not to sell off major assets
after a strategic review by its new early this month
The company fired its chief executive in July and replaced
him with Steve Bennett, a former CEO of Intuit who had spent
more than 20 years at General Electric Co before heading to
"We looked at five different scenarios and modeled them all
and talked about them all," Bennett said in an interview on
Wednesday. The scenarios included divesting specific units in
Symantec's portfolio such as profitable consumer anti-virus
business and a sluggish storage management and backup software
unit. "We can create a lot more value by running the company."
Still, he left room for the board to change its mind if any
of the new businesses do not work out.
"This process is going to be ongoing and we'll deal with
anything that doesn't fit," he said during a meeting with
investors at Symantec's headquarters in Silicon Valley.
Bennett, who quoted former GE CEO Jack Welch during the
presentation, unveiled plans to reorganize Symantec's sales
force, expand its marketing efforts and change the way it sells
goods over the web.
He told Reuters that the company had erred by failing to
integrate many products it has acquired into suites, losing
opportunities to achieve cost efficiencies and bundle
complementary technologies into packages that rivals could not
Bennett would not say how many managers would be laid off,
but noted that Symantec, which has 20,000 employees, had far
more managers than most companies. Symantec managers on average
have few than five people reporting to them. That is about half
as many managers at a typical company, he noted.
"It is hard to make decisions. It slows you down.
Communication is bad. There are too many people in meetings," he
"We have tremendous assets, but we haven't been deploying
them," he said. "Our system doesn't work."
The company forecast that the changes will boost profit
margins, partly due to big increases in the efficiency of
Symantec's vast sales and marketing groups. It forecast that
spending on those activities will fall to 27 percent of revenue
by 2017, down from 41 percent last year.
Meanwhile, spending on research and development will rise to
16 percent of revenue from 14 percent over the same period as
the company boosts investment in its new product suites, which
it will build over the next six months to two years.
The company's shares were holding steady at $21.66 in
after-hours trade, from a close of $21.46 on the Nasdaq.
Separately on Wednesday, Symantec reported quarterly
earnings that beat expectations and said it was splitting the
chief executive and chairman jobs.
It reported a profit of 45 cents per share, excluding items,
for its fiscal third quarter ended Dec. 28. That topped the
average analyst estimate of 38 cents, according to a poll by
Thomson Reuters I/B/E/S.
The company also named independent director Dan Schulman to
the position of non-executive chairman, replacing Bennett, who
remains CEO and president.
Bennett said the appointment would boost oversight of the
senior executive team and give him more time to focus on
managing the business and executing the new plan that he laid
out on Wednesday.
Symantec's problems trace back to 2004 when the company
bought storage software maker Veritas for $13.5 billion in a
deal the companies promised would transform the software
industry. It failed to live up to those expectations and
instead Symantec has reported mixed results in the years that
followed, repeatedly disappointing Wall Street.
Salem inherited that legacy when he took over as CEO in 2009
from John Thompson, who engineered the Veritas acquisition.
During Salem's tenure, Symantec shares fell about 19 percent,
while the Nasdaq Composite Index climbed about 77