RealTime IT News

SonicWALL Rearranges its Bricks

Internet security company SonicWALL Friday announced plans to restructure its company and focus more on new product development.

The Sunnyvale, Calif.-based firm said it will cut 15 percent of its staff to reinforce its new focus as well as the indirect selling of those products through the company's resellers and distributors.

The company was not specific on which product lines or projects would be impacted.

"When I joined SonicWALL, we stated that one of my first goals would be to evaluate our operations and strategy to ensure that they are aligned for growth and shareholder value," SonicWALL president and CEO Matt Medeiros said in a statement. "This action represents an important step in that direction; making sure we have the right resources invested in the right areas is a critical step in repositioning the company for success."

SonicWALL specializes in broadband network security devices including firewall, VPN, SSL, high availability, anti-virus, content filtering and vulnerability assessment products. Recently, SonicWALL released the second incarnation of its Content Filtering Service or CFS 2.0. The platform combines a dynamic URL database with the company's rating and caching architecture. The company sells primarily through distributors, including Ingram Micro (about 20 percent of sales) and Tech Data. About a third of sales come from customers outside the US.

But SonicWALL has had a hard time keeping out increased competition from Check Point Software and Cisco Systems . This is the second restructuring by SonicWALL in 14 months.

The restructuring could signal even more changes to come at SonicWALL. Earlier this week, former Philips Electronics and Honeywell exec Edward Cohen was appointed to the newly created post of director of mergers and acquisitions. The company said Cohen will "drive the company's strategic process to identify, evaluate and integrate inorganic business growth options."

Because of the restructuring, SonicWALL said it will have to spend between $1.5 to $2.5 million in the current quarter. In addition to severance costs, these charges are expected to include excess facilities costs and the write down of certain leasehold improvements and other fixed assets.