By Stephen Shankland, 4 October 2002 08:40
NEWS Storage giant EMC has become the latest high-tech firm to announce further swathes of redundancies, as the gloom in the job market continues to show few signs of lifting. EMC has announced that it plans to cut its workforce by seven per cent and warned that it doesn't expect to meet its goal of profitability in the second half of the year. EMC, which sells higher-end storage systems and the software used to manage them, claimed spending in the IT sector has meant it needs to accelerate cost-cutting efforts. The company has been the target of Hewlett-Packard, Hitachi Data Systems, IBM and Sun Microsystems, rivals that lowered EMC's once-plump profit margins. CEO Joe Tucci said in a statement: "The IT spending environment continues to be brutal. In fact, it got even worse at the very end of the quarter. Our third quarter was on track until late September." For its third quarter 2002, the company expects revenue of about $1.25bn and a loss of two cents per share, not including any special adjustments. Merrill Lynch analyst Steve Milunovich had expected revenue of $1.39bn. In trading Thursday, EMC's shares had increased 13 cents, or three per cent, to $5.01. But after the post-bell warning, the stock dropped nine per cent from its closing price, to $4.57. Stephen Shankland writes for News.com
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