Brocade Communications Systems Inc., the largest storage switch company, announced layoffs of 155 people, or 8.6 percent of its staff, Thursday.
The move leaves the San Jose, Calif., company with 1,200 employees, spokeswoman Jennifer Hart said after markets closed Thursday.
“If you look at Brocade and where we are focusing … what we looked at across the board was how do we become a more efficient organization. Its part of standard aggressive management,” Hart said.
Brocade has seen increased competition recently from McData Corp. and expects more competition from switch newcomer Cisco Systems Inc., industry watchers said.
Brocade cut 12 percent of its staff late last year. “I cant say whether therell be more,” Hart said. The move will not affect any product development plans, she added.
Brocade, which lost money in the first quarter, is expected to announce its second-quarter results in May. The companys new strategy is to run applications like virtualization and storage-agnostic management software directly inside networks, officials have said.
Brocades strategy was defined by its acquisition of Rhapsody Networks Inc. for $175 million last November. Brocade President and Chief Operating Officer Michael Byrd; General Manager/Vice President of Services, Solutions, and Alliances Rich Geruson; and Chief Technology Officer and Vice President of Engineering Morris Taradalsky all left the company soon after.
“They probably had a little bit of duplication with some of the people from the acquisition,” said industry analyst Steve Kenniston, of Enterprise Storage Group Inc., in San Jose. “I wouldnt be surprised” to see more such moves in their niche, he added.
Other recent consolidations in the storage switch industry are Computer Networking Technology Corp.s $190 million deal for Inrange Technologies Corp. this week and Sun Microsystems Inc.s purchase of startup Pirus Networks Inc. last September.
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