5 Companies That Had A Rough Week

The Week Ending June 9

Topping this week's roundup of those having a rough week is IBM, which is losing a major customer for its SoftLayer public cloud service.

Also making the list this week were Dell EMC for having to raise PC and server prices because of memory and SSD component shortages; Optiv Security, which has seen a wave of executive departures since it was acquired by a private equity firm; and employees at Hexadite and Nokia who were hit by rounds of layoffs.

Not everyone in the IT industry was having a rough go of it this week. For a rundown of companies that made smart decisions, executed savvy strategic moves – or just had good luck – check out this week's Five Companies That Came To Win roundup.

IBM SoftLayer Takes A Hit When Facebook Pulls WhatsApp From The Public Cloud Service

IBM's efforts to compete against Amazon Web Services, Microsoft and Google in the public cloud arena took a hit this week when it was reported that Facebook plans to move its popular WhatsApp off of IBM's SoftLayer public cloud service.

Facebook intends to run the WhatsApp chat service in its own data centers, according to a story reported by CNBC. WhatsApp has been one of SoftLayer's high profile clients and is used by 1.2 billion people.

CNBC said the WhatsApp move could begin later this year. While some reports said WhatsApp is one of IBM SoftLayer's five biggest clients, the CNBC story quoted IBM as saying WhatsApp was not currently one of its top five public cloud customers.

Dell Technologies Forced To Raise System Prices Because of Memory, SSD Shortages

Dell acknowledged this week that it must raise prices on its PC and server products due to the sharply rising costs of memory and solid state drive components.

CFO Tom Sweet said the company anticipates that the rising costs, due to component shortages, to persist for the rest of the year.

Dell also spent part of the week wrestling with a problem with its purchase order system that had frustrated partners globally. Partners' purchase orders were being significantly delayed because Dell EMC's system was experiencing "higher than anticipated demand from our newly combined customer base," Dell EMC said in a statement.

The problems with the purchase ordering system appeared to largely impact the U.K. and Australia. Dell EMC this week said it had remedied the problem.

Opti v Security Faces Flood Of Executive Departures Following KKR Acquisition

Optiv Security has seen a wave of top-level executive departures since private equity firm KKR & Co. acquired the security-focused solution provider in March, CRN reported this week.

CRN identified at least nine VP-level executives that have left the company since January, some of whom have already posted their new positions at other companies on LinkedIn.

Sources told CRN that the departures were due to multiple factors including compensation changes for the executive staff in recent months and increased pressure to hit higher sales targets. Sources also said other companies, especially security vendors, have been heavily recruiting Optiv executives.

Hexadite Reportedly Lays Off U.S.-Based Staff After Microsoft Acquisition Announcement

It hasn't been a good week to be an employee at security technology company Hexadite, which has cut most of its U.S.-based staff – including its channel chief – in the wake of its agreement to be acquired by Microsoft, multiple sources told CRN.

The cuts included the company's U.S.-based sales, marketing and operations staff. The layoffs came Thursday, the same day Microsoft announced that it had signed an agreement to acquire the security automation startup.

Hexadite had around 35 employees with about half of those affected by the layoffs. The cuts did not appear to include Hexadite's research and development operations in Tel Aviv, Israel.

L ayoffs Continue At Nokia As Part Of $1.3B Cost-Cutting Effort

Layoffs have seemingly become a way of life at Nokia. But it was still a rough week for workers at the Finnish telecommunications equipment maker, which confirmed this week plans to cut 170 positions as part of an ongoing cost-cutting initiative.

The cuts stem from Nokia's 2015 acquisition of Alcatel-Lucent and a subsequent $1.3 billion cost-cutting plan to eliminate up to 15,000 positions out of the combined Nokia and Alcatel-Lucent workforce of 101,000.

Nokia cut 960 jobs in Finland last year and said it would cut an additional 1,400 employees in Germany.