EMC Warns of Lower Sales, Layoffs
The Hopkinton, Mass. storage giant expects total revenue to be about $1.25 billion, for a loss of 2 cents per share. This 3Q loss compares with a loss of a penny per share in the second quarter of 2002.
While the firm claims it made progress in its cost reduction efforts, it said the continued weak outlook in IT spending forced EMC to initiate the layoffs, which will bring its total workforce to about 17,000 employees.
That head count is down from a peak of 24,500 early last year. It is not yet clear how many of the approximate 7,350 employees in Massachusetts will be affected in this round, the third major job cut for EMC since the beginning of last year.
In discussing the actions, EMC President and CEO Joe Tucci called the IT spending environment "brutal."
"In fact, it got even worse at the very end of the quarter," Tucci said. "Our third quarter was on track until late September. The harsh reality of reduced budgets and the uncertainty of the economic and geopolitical climate are weighing heavily on business confidence, causing key projects and the corresponding IT spend to be delayed."
EMC also said that its board of directors approved a buyback of an additional 250 million shares, to be initiated after the release of the full quarterly earnings on October 17, 2002.
EMC competes with the likes of Dell, HP, IBM and other systems vendors in the data storage hardware and software markets. The firm has been making headlines as of late, buying up storage software maker Prisa Networks and upgrading its automated network storage software in recent weeks.