RSA Security Inc. on Wednesday announced that it will cut 200 jobs and take a second-quarter charge of at least $8 million as part of a sweeping corporate reorganization.
The job cuts come less than two weeks after the Bedford, Mass., company posted a loss of $13.7 million for the first quarter vs. a profit of $9.8 million the previous year.
As a result of the changes, the company now comprises three divisions: authentication products; developer solutions/encryption; and Web access management products. RSAs global sales, marketing and professional services forces will merge into one organization, led by Scott Schnell, a senior vice president.
The authentication division will include the SecurID and Keon products, the developer solutions/encryption group will handle the BSafe product line, and the Web access management division will include the ClearTrust line.
The layoffs, which amount to 17 percent of RSAs total work force, will be completed in the United States this week and as quickly as possible in the companys international offices. The new organizational structure will be in place by the end of this week, as well, company officials said.
The rationale for the structural changes was to bring the companys organization in line with the business plan, RSA officials said, and to put the focus on the areas where the company sees future growth opportunities. And the changes may not be done.
"Were looking at ways to simplify our product line, but its premature to talk about" which products might disappear, said John Worrall, vice president at RSA.
Its been a rough year for RSA, which has seen its stock price plummet from nearly $40 in late May 2001 to its current level of just above $7. And in January, the company announced that the Securities and Exchange Commission had begun a formal investigation into the companys change of accounting methods, which RSA announced in its 10-Q statement in the first quarter of 2001.
The SEC is looking into whether the company should have announced the change in a press release a few weeks before the 10-Q statement.