Quantum axes one in ten workers, insists it was not investor's idea

Backup biz tries to pull out of tape nosedive


Troubled tape'n'disk biz Quantum has laid off roughly 10 per cent of its workforce.

Quantum has struggling to rebuild its business since the tape backup market declined in the wake of disk-to-disk backup. It has made investments and acquisitions in the software data management area, the latest bringing Amplidata object storage into its StoreNext product set.

However, revenue from the gobbled businesses have yet to balance falling tape-based income, and the company has stumbled through three quarters of losses. But Quantum is adamant the acquisitions are crucial to its future and their development must not be compromised.

"Like other global companies, Quantum is impacted by broader market changes," said Christine Bachmayer, Quantum's senior marketing manager for EMEA. "Therefore, when we announced our Q2 earnings results in October, we stated that we would be reducing our cost structure to drive greater profitability and continue our strong level of investment and innovation, particularly in Quantum’s disk and software business, which grew nearly 20 per cent in the quarter over the previous year."

She also explained why some staff have been axed this season:

The reductions in our cost structure included the elimination of just under 10 per cent of positions at the company. As we continue to invest in the growth areas of the business, we are also redirecting resources where it makes sense, but the skills that we need are not always the same as those we needed in the past.

Sources close to the situation at Quantum said approximately 180 employees were let go, similar to the number made redundant four years ago.

"And unlike the last layoffs in 2008, this time they went after some very skilled employees with 10 to 15 years of tenure at the company," one well-placed contact told The Reg. "On the heels of this is a forced Christmas holiday shutdown to expunge unused vacation time from the books."

News of the cost-saving layoffs emerged after asset-raider Starboard Value purchased Quantum shares and demanded a seat on the board. Starboard boasts it invests in "deeply undervalued" companies and can "identify and execute on opportunities to unlock value for the benefit of all shareholders".

But Bachmayer ruled out a connection: "The decision on the [staff] reductions was not tied to Starboard Value’s investment in Quantum, which was announced after our earnings announcement."

The effect of the Starboard incursion into the ranks of Quantum's major stockholders remains to be seen. Quantum said it is willing to talk to Starboard about its intentions, and The Reg storage desk awaits the outcome of such discussions. ®


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