Security vendor Entrust Inc. is laying off some of its workers, closing several remote offices and doing a partial reorganization in a broad effort to slash costs as it transforms its product line. The company did not say how many people will be let go; only that it is hoping to cut $5 million in costs each quarter for the remainder of this year.
As a result of the restructuring, Entrust will be taking a charge of about $22 million in 2003, $18 million of which will be in the second quarter. Company officials said the moves were the result of still-weak demand for big-ticket technologies.
"The enterprise market is still not out of the tough economic climate for IT projects, including security," said Bill Conner, president and CEO of Dallas-based Entrust in a conference call Tuesday morning announcing the layoffs and restructuring.
Conner said that all of the companys job functions and organizational areas will be affected by the job cuts, but that the sales force took the smallest hit.
Entrust is in the midst of a complete overhaul of its product line, which once concentrated almost exclusively on PKI-based solutions and technologies. After the anticipated demand for PKI systems failed to materialize during the last couple of years, the company shifted its focus to other areas of security. Now, Entrusts offerings include a variety of identity management solutions as well as web services security products.
The company, a spin-off of Nortel Networks Corp., still sells quite a few PKI products, but is working to become less dependent on them for the bulk of its revenue.
Despite the restructuring charges and other moves, Entrust executives did not change their financial guidance for the companys second quarter earnings outlook. Entrust is still targeting revenue of $22 million-$26 million for the quarter.
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