Security company FireEye will layoff 350 employees as part of a board approved restructuring plan. Kevin Mandia, the company’s new CEO, made the announcement yesterday during the firm’s second quarter earnings call.
FireEye expects the restructuring will reduce costs by at least $20 million in the fourth quarter of 2016. However, those costs will be offset by $15 million to $20 million in severance and other one-time termination benefits. These charges are primarily cash-based and are expected to be recognized in the third quarter of fiscal 2016.
According to a research note from analyst Catherine Trebnick with Dougherty & Company, FireEye billings of $196.4 million were below guidance of $200 million to $215 million. Total revenue of $175 million was below its estimates of $181.4 million to $181.7 million. However, non-GAAP earnings per share of 33 cents was above the Street’s estimates of 39 cents per share.
SDxCentral foreshadowed more difficult times ahead for FireEye, when we covered its first quarter earnings in May. At that time, the company had just hired Mandia and was in the process of laying off about 200 employees.
Its difficulties stem from the rapid transition from traditional security appliances to subscription-based software.