EMC Expects To Cut 1,000 Positions In 2006

EMC expects to cut 1,000 positions this year even as the storage giant moves to expand sales coverage and grow its product development team.

EMC said Friday it aims to take a fourth quarter charge of of approximately $80 million to cover the cost of the employee separation benefits. The workforce reductions are expected to be complete by the end of 2006.

EMC announced the workforce reduction as part of a report of preliminary fourth quarter results. EMC said it expects to report total consolidated revenues for the fourth quarter of between $2.70 billion and $2.71 billion. Excluding certain items, EMC said diluted earnings per share for the quarter were expected to be at the high end of EMC's previously announced expectations of 17 cents per share. EMC shares were down 2 percent or 31 cents in midday trading to $13.67.

James Addlesberger, president and CEO of NavigateStorage, a Concord, Mass. storage integrator who sells the EMC Dantz product, said he expects workforce rebalancing efforts from larger vendors and does not expect the move to affect his partnership with EMC.

As for the storage market, Addlesberger said NavigateStorage just completed its best year ever. "We are a small reseller seeing a lot of strength in email archiving and data protection for the enterprise," he said. "The storage market is booming and we are enjoying it."

EMC also reported preliminary record annual results, reporting consolidated revenues for the full 2005 fiscal year of between $9.65 billion and $9.66 billion, an increase of 17 percent over 2004. EMC plans to announce complete fourth-quarter and full-year results on the morning of January 24.

As for the workforce rebalancing, EMC Chief Executive Joe Tucci said in a prepared statement that the "best companies preserve their leadership by looking out to the horizon and making adjustments today to position themselves for shifts in customers' expectations and market dynamics."

"While we continue to focus on improving our overall cost efficiencies, we also plan to utilize this rebalancing to invest in sales and R&D in order to accelerate our innovation engine to capture an even greater share of our expanding market opportunity," added Tucci.