Even High-Riding EMC Facing Layoffs

EMC, the world’s largest seller of enterprise data storage hardware and software, said Jan. 7 that it will trim about 2,400 jobs-or about 6 percent of its staff over the next 12 to 15 months-in light of the global recession.
In filing its preliminary quarterly financial report to the SEC, EMC also reported quarterly profit that was “in line with its most-recent [fourth-quarter] forecast,” company spokesperson Dave Farmer told eWEEK.
In its fourth-quarter report to be made public on Jan. 27, EMC will report profit of 23 to 24 cents a share, Farmer said. That is in line with the 23-cent average forecast of analysts polled by Reuters Estimates.
Overall, EMC will report $4 billion in revenue for the fourth quarter on Jan. 27.
The company will also take a charge of 10 cents per share related to the restructuring, Farmer said.
“Our goal is to position EMC for continued success throughout the downturn and for even greater success during the next economic growth cycle,” President and CEO Joe Tucci said in a statement to the press.
The cost cuts are designed to reduce spending by about $350 million in 2009, the company said. Savings from the layoffs are expected to increase to about $500 million in 2010.
“I was not surprised at either the revenue or the layoffs,” despite EMC’s profitability, storage analyst Brian Babineau of Enterprise Strategy Group told eWEEK. “EMC continues to execute at very high levels, but at some point, the economy catches up with everyone. They are simply being more proactive in aligning costs with what 2009 is expected to bring.”
EMC shares rose to $12 in after-market trading, from their New York Stock Exchange close of $11.18.