Storage vendor EMC Corp. on Tuesday said it would cut its worldwide workforce by 1,100 employees or 4 percent in an effort to cut operating expenses and deal with the current U.S. economic slowdown.
In a statement about strategies for expanding its business, Hopkinton, Massachusetts-based EMC said it would make the cuts during the next several weeks and that it will leave the company's total employee base at 23,300 -- the same figure the company started with at the beginning of 2001. EMC will incur a charge of US$21.8 million or $0.01 per share for the company's second quarter that ends June 30 to cover the costs of cutting the jobs.
EMC said the cuts would seek to eliminate redundancies and overlap in certain field operations. The company did not provide specifics on where the cuts would be felt the most.
The company also will reduce the resources focused on the server business it inherited when it acquired Data General Corp. in 1999. EMC also will cut the use of consultants and contractors, lower travel expenses and delay some facility expansion, the company said.
EMC warned in February that its fiscal 2001 revenue may come in lower than initially anticipated. In a statement at the time, EMC said it could still reach its 2001 revenue goal of $12 billion, but also added that revenue growth could come in at between 25 percent and 35 percent, lower than the 33 percent to 38 percent range it had indicated previously.
EMC's executive team then updated the forecast after the company's first quarter, saying revenue growth would be about 20 percent for the year, said EMC spokesman Mark Fredrickson. That puts the revenue target for the year at $10.6 billion, he said. EMC had revenue of $8.9 billion for the full fiscal 2000, he said.