Seven per cent of Brocade's global workforce is set to be let go as the vendor looks to focus on its software-defined networking strategy.
In an 8-K filing to the Securities and Exchange Commission (SEC), Brocade said its workforce reduction plan will affect 300 of its staff, all of whom have been notified. The company currently employs 4,180 staff.The vendor expects the job cuts to cost it between $20m (£12.6m) and $25m in severance packages and associated costs.
UK channel boss John Mitchell told CRN that while he could comment on the impact of the cuts in the UK, he could confirm that the channel business was not affected.
In its 8-K filing, Brocade said the job cuts were intended in order to "realign resources in connection with its... datacentre and software-defined networking strategies and cost-reduction initiatives".
Brocade's chief executive Lloyd Carney (pictured) announced he plans to reduce expenditure by $100m by 2014 earlier this year, and the recent job cuts form part of that plan.
At the vendor's EMEA partner summit held in Prague over the summer, Carney told CRN how his firm was stuck in an "innovator's dilemma" in that pushing its new virtual router and Ethernet technology eats into its core physical router business. Despite the problem, he claimed the gamble of encouraging sales of its new tech was not only wise for its long-term strategy, but was even paying off already.
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