Quantum Execs Detail Reorganization, Layoffs
Chairman and CEO Rick Belluzzo remains, however, Storage Solutions Group President Larry Orecklin will leave by the end of this year, officials said. Orecklins division will be merged with the DLT Group, with current DLT President John Gannon becoming corporate president and chief operating officer, they said.
The moves will help customers to deal with "a single team that understands all their needs... improved cost efficiencies, product integration and time-to-market," the company said in a prepared statement.
Most of the layoffs involve middle management, such as vice presidents, sales positions and contractor management, Belluzzo said in an interview. He declined to rule out more layoffs. "You never say never, but its certainly not what we want to do," he said.
According to Belluzzo, the SSG group was created in 1998; "during the boom times in the industry, we were going through quite a bit of change in the company," such as selling the hard drive business. Now, "these are different times. The environment requires the utmost in efficiency and execution," he said.
In addition, Belluzzo did not give a timeframe for returning Quantum to profitability, but added that todays moves will help. There were no layoffs in customer support or product rollout planning, he noted.
The reorganized company will have a Quantum-branded sales force and an OEM sales force, and revenue is expected to be flat for the current quarter, with losses between 14 and 17 cents per share, officials added.
Quantums last profit of $592,000 came in the quarter ending in Dec. 2001, and profitability hasnt been close since Quantum made $235 million in revenue, losing just $5 million, in the quarter ending in March 2003. In the most recent earnings, announced in October, Quantum backtracked to $195 million in revenue while losing $38 million.
Earlier this month, Belluzzo discussed the companys future plans in another interview. Quantum is considering product realignments and possible acquisitions.
"We like the fact that we have four platforms. But those products were designed and acquired in different places. That doesnt make for the most efficient, cost-efficient design platforms," he said. "In a couple of years instead of having four platforms well have two, or maybe two plus an extension," he continued.
Having recently upgraded its high-end libraries, Quantum will address upgrading its midrange products next, Belluzzo said.
Of possible acquisitions, Quantum has $273 million in assets, officials recently said. "We dont have a war chest but we have plenty of leverage," Belluzzo noted. "As long as customers are still seeking value, we think well do just fine. Were confident that were going to build a better business here."