EMC, VMware dangle axe over 1,804 workers around the planet

Tech CEO 101: Sales up, profits down, time to sharpen blade


In the week of EMC's self-congratulatory EMC World extravaganza in Las Vegas, the storage giant revealed it will slash 1,004 jobs.

The cuts will be felt worldwide in the company's Information Storage, RSA Information Security and Information Intelligence divisions, according to EMC. The redundancies will cost the biz $80m. This is on top of the 800 staff facing the chop at EMC subsidiary VMware, as announced in January.

EMC's latest 10-Q paperwork, a document filed quarterly with the US Securities and Exchange Commission (SEC) to keep investors informed, disclosed the following:

In the first quarter of 2013, EMC implemented restructuring programs to create further operational efficiencies which will result in a workforce reduction of 1,004 positions.

The actions will impact positions around the globe covering our Information Storage, RSA Information Security and Information Intelligence Group segments, and is expected to result in a total charge of approximately $80.0 million, with total cash payments associated with the plan expected to be approximately $73.0 million.

All of these actions are expected to be completed within a year of the start of each program.

Not wanting to be outdone, VMware, the virtualisation software jewel in EMC's crown, reaffirmed January's cull of about 7 per cent of its workforce, according to the same 10-Q filing:

In the first quarter of 2013, VMware implemented a plan to streamline its operations in order to focus its business on strategic areas it has determined to be most compelling. The plan includes the elimination of approximately 800 positions across all major functional groups and geographies.

How was VMware's first quarter? Revenues for the first three months of 2013 were $1.19bn, an increase of 13 per cent from the first quarter of 2012. Profits were $174m, down 9 per cent on the year before's $191m.

EMC's financial results for the first calendar quarter showed revenues up but profits down too, year on year. It looks like EMC supremo Joe Tucci and VMware boss Pat Gelsinger want their net income back up again, and 1,804 people, mere numbers on a spreadsheet, are part of the price for profitability. ®

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