CA Will Cut 1,000 Jobs, Keep Eye on the Cloud

An internal CA memo announces the elimination of 1,000 jobs. The infrastructure-focused software company has been busy restructuring its business strategy around cloud products and has been in rapid-acquisition mode, having purchased three companies in 2010 already.

Enterprise software company CA announced it will be slashing 1,000 jobs from its workforce at the end of April, according to an internal memo from CEO Bill McCracken. As part of a larger business strategy with an emphasis on cloud products, CA has been rapidly expanding its product base with cloud company acquisitions. As part of the restructuring announced in an SEC filing, CA expects to have pretax charges for severance of $47 million and $3 million for "global office consolidation."
All of the job reductions will be complete by the end of the second fiscal quarter in 2010, with the majority of them occurring in North America, said the memo.
"As difficult as they are, these actions are necessary to focus our skills and investments on those activities that support our corporate strategy and have the greatest impact on our performance, growth and customer loyalty," McCracken wrote in the memo. "The industry and the market are changing, and we have to change, too."
In the last three months, CA has purchased Nimsoft, 3Tera and Oblicore; in 2009, CA purchased Cassatt and NetQoS.
"We want to reach new customers, and we want to reach them in a way we haven't been able to do here at CA, even after a couple of tries," McCracken said in a conference call with analysts about the Nimsoft acquisition.
In the same article, eWEEK Managing Editor Jeff Burt reported that CA is positioning itself as a provider of infrastructure software to an emerging MSP (managed service provider) market. Burt wrote about McCracken's take on where CA is planning to play:

"The emerging enterprise space will account for about a quarter of the software spending in CA's market by 2013, McCracken said. The MSPs are key providers of cloud computing for businesses, and the cloud will play a significant role in emerging economies, he said."

McCracken, described by the Wall Street Journal as a 36-year veteran at IBM, was named CEO of CA in January after previous CEO John Swainson announced his retirement plans in September 2009.

"We're investing in strategic acquisitions to help establish our leadership in emerging technologies and high-growth markets," McCracken said in the memo.

"This has added new talent and expertise to our team. We're also streamlining operations across our businesses and functions to make sure we're more efficient. And we're consolidating additional facilities to reduce our real estate costs.

It's not enough to accelerate our growth. Our objective is profitable growth."