Sniffer Sale Triggered McAfee Layoffs


Some 100 McAfee employees were shown the door. The layoffs hit all parts of McAfee's organization, not just sales, and everyone given a pink slip was what Hodges called "shared resources," meaning each had at least one foot in the functions of the Sniffer division.

"At the beginning of July, we organizationally separated Sniffer from the McAfee sales force," Hodges said. "We expect the Sniffer divestiture to close in the second half of July, but sales organizations need to run on clearly packaged quarters. That means that at the beginning of July we formally separated those sales organizations."

Of the sales people effected by the layoffs, Hodges said, "almost all were in the direct sales force, with a couple of channel people impacted due to territory shuffles."

CRN first reported the impending layoffs June 21.

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Since July 1, nearly a dozen channel sources have reported the loss of one or more McAfee sales representatives.

One McAfee employee who was laid off said a number of field account managers were let go by McAfee, and that he was given a one page list of the titles and ages of those laid off. He declined to be named, or give his title.

For the moment, McAfee is keeping the exact details of the restructuring, and the final field sales headcount, to itself. Some regions saw added sales manpower, others saw reductions. Overall, Hodges believes the net change to its sales force was minimal. "Call it a wash," he said.

McAfee's recently revived effort to establish a reputation as a channel-focused company remains unchanged, Hodges said. "The divestiture of Sniffer is clearly a big event for us, and we are doing quite a few changes in our organization, sales included. In terms of the changes in sales, the impact is predominately driving us toward a channel model," he said.

Hodges comments came on the same day McAfee named David Roberts as the company's new senior vice president of North America channels. Roberts was executive vice president of enterprise sales and professional services at Corel, where he was responsible for restructuring the business to focus on channel sales and corporate accounts, according to McAfee, Santa Clara, Calif.

On choosing an outsider to head up McAfee's domestic channels, Hodges said, "We looked at both internal and external. Dave has a pretty good background, and one of the things we wanted was someone who could work with a wide range of channel partners from distribution to the high volume partners, the enterprise software resellers, the outsourcers, the service providers in security, network integrators " it's a pretty wide channel mix and Dave has a lot of experience in key areas."

Word of the approaching July 1 layoffs at McAfee sent a tremor across the industry, and several Wall Street insiders said McAfee, then called Network Associates, was entertaining offers to be acquired.

Could McAfee have executed the July 1 changes any better? "I don't recall many companies who divested 35 percent of their business, changed their focus, changed the name of their company, doubled profitability once, committed to a doubling again, without a little bit of impact," Hodges said. "So can you do it better? You can always do it better."