And then there were three...

Internet security firm Network Associates (NAI) says it is closing down its PGP Security business unit and firing 250 employees in the process.

Santa Clara, Calif.-based NAI made the announcement Thursday after posting a loss of $11.3 million, or eight cents a share for the company's third quarter. Compared to last year, the company's revenue dropped 12 percent to $209 million from $238.7 million.

Changes for the company's bottom line were evident the minute chairman, president and CEO George Samenuk stepped into the post in January.

"Nine months ago I committed to returning this company to profitability while instilling a focus on customers throughout every level of the organization," says Samenuk. "I remain dedicated to that commitment as does every Network Associates employee. Today's results demonstrate the promise of a focused, global organization, and I am very proud to be a part of this worldwide team."

NAI was broken into four main components. McAfee (anti-virus software); PGP Security, (firewall, intrusion detection and encryption products); Sniffer Technologies, (network and application management); and Magic Solutions (Web-based service desk software).

Now PGP, which stands for Pretty Good Privacy, VPN, PGPfire (Distributed Firewall) for corporate users, and the PGP E-Business Server will be branded and sold as McAfee products. The CyberCop vulnerability assessment tool continues to be available as a stand-alone product. The technology will also be integrated into the Sniffer family of products which will be brought more into the forefront.

Network Associates says it will continue to maintain and support PGP desktop encryption and Gauntlet firewall product lines for existing customers around the world, while looking for a buyer for those technologies.

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The changes are expected save the company approximately $50 million in 2002. The company expects to take a one time restructuring charge of between $9 million and $11 million in the fourth quarter related to these changes.