Veritas insiders: Job cuts? There will be blood
Drafts in corp restructuring biz Alix Partners to cut costs, improve margins
Veritas Technologies has hired a corporate restructuring specialist in the face of business difficulties.
El Reg was told by Veritas insiders that CEO Greg Hughes has engaged Alix Partners to look at the company structure. He discussed cost pressures, initiatives and possible actions being considered at a 15 February all-hands meeting that was beamed direct to employees.
Ross Camp, Veritas senior director for global corporate comms, who was asked about these specific points, said:
As is the case with any organisation when there is a change of leadership, Veritas’ new CEO, Greg Hughes is evaluating all aspects of the business to maximise the company’s strong talent pool, increase growth and profitability, and accelerate innovation in key areas of focus for the company. As a result, the company will determine what modifications need be made to deliver the greatest value to customers, partners, employees and investors.
Veritas history recap
Veritas was spun out of Symantec in 2014, and sold into the Carlyle private equity group for $7.4bn in 2016. It had around 7,000 staff and more than 50,000 customers, but was presented as a $3bn startup.
The Carlyle Group, operating the usual private equity ownership playbook, started reshaping the company, with, for example, a restructuring of its Sydney office support organisation and other offices.
Veritas was operating in a data protection and management market galvanised by virtualised servers and hybrid public cloud-on premises deployment of applications and data. Newer vendors such as Veeam, Rubrik and Cohesity have grown fast, forcing change on legacy vendors like Veritas.
The company started a move towards embracing the cloud and cloud business practices (subscription) last year.
Pay measures and layoffs
The Register has heard from inside Veritas that efficiencies and cost-cutting measures are being pursued, with bonuses and merit-based salary rises being looked at.
Company sources that spoke on the condition of anonymity claimed senior management wanted to increase profit margins, with one citing a desired rise from 30 to 40 per cent, and claiming that no bonuses would be paid for this financial year.
Camp told us: “While Veritas does not comment on specifics around employee compensation, the company offers a compelling total rewards package to employees that includes merit pay increases and opportunities for bonus incentives. That will continue this calendar year.“
We have also heard Veritas is considering layoffs at Green Park (Reading, UK) and Blanchardstown (Dublin, Ireland). Support may be concentrated in Pune, India with reductions in Dublin. All of this is to eke out cost savings.
In response, the PR man said: “While the company also refrains from discussing future restructuring efforts, Veritas can confirm there has not been any decision made regarding the sites outlined in your inquiry. That information should not be considered factual at this time."
Legacy product focus
It has been suggested, by our insiders, that the company is focusing less on new products and more more on its legacy lines, and their renewals, maintenance and support.
Camp responded: “In the coming quarters, Veritas plans to announce innovations with its core products as well as introduce new solutions that will empower the company’s large installed-base of customers to solve some of their biggest IT and data management challenges on-premises and in the multi-cloud. Veritas will also continue to focus on enabling partners to increase profitability while providing additional value to their customers.”
He added: “Within the last two years, Veritas has introduced the 360 Data Management Platform and unveiled a range of new solutions including CloudPoint, the Veritas Resiliency Platform and Access.”
The Carlyle Group has spent big bucks on Veritas, $7.4bn of them, and obviously needs to make big bucks on the deal. The bigger picture is by no means near to completion yet. ®