EMC Plans Layoffs, Says Tucci Not Retiring Yet

Joe Tucci

EMC, despite professing thanks for the hard work of its employees during its second fiscal quarter financial analyst call, quietly unveiled a plan to lay off an unspecified number of employees.

However, one employee, Chairman and CEO Joe Tucci, is still defying expectations of leaving the company, and said he will continue to serve as long as EMC asks.

EMC also used its financial conference analyst call to discuss its absorption of VCE, the former joint-venture builder of vBlock solutions, into a new converged infrastructure business unit, and dropped hints about next week's expected release of a low-cost, hyper-converged infrastructure appliance.

[Related: EMC Combines VCE, VSPEX Into New $1B-plus Converged Infrastructure Business]

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CRN on Thursday first reported the formation of EMC's new converged infrastructure business unit, and also provided details about the upcoming hyper-converged infrastructure appliance likely to be available as part of a VSPEX reference architecture.

EMC, in a Thursday Form 8-K filed with the SEC, said the company's management had approved a restructuring plan, which includes a reduction in force, with the majority of the layoffs scheduled for the first quarter of 2015 and all layoffs scheduled by year-end.

While EMC did not specify the number of employees to be laid off, the company said it expected the cost of the reduction in force to be between $130 million and $150 million.

EMC layoffs have become something of an annual ritual. The company unveiled similar layoffs during its fourth quarter 2013 and its fourth quarter 2012.

While it is not yet clear where the layoffs will happen and who within EMC will be affected, they could be good news for channel partners, said Sam Haffar, CEO of Computex Technology Solutions, a Houston-based solution provider and EMC channel partner, in an emailed response to CRN.

"If the field sales is affected it should make the channel more vital to EMC," Haffar wrote. "We will wait and see how things shake out."

No mention was made of possible layoffs during the fourth fiscal quarter analyst conference call. Indeed, Tucci used the call to praise EMC employees without referring to the layoffs.

"I would like to publicly thank the 68,000-plus people of EMC, VMware and Pivotal, along with our ecosystem of great partners around the world, for their dedication, hard work and vast expertise, and for always striving to meet and exceed the expectations of our customers," Tucci said.

NEXT: Tucci's Retirement Plans Still Uncertain, EMC's Converged Infrastructure Plans More Certain

Tucci himself expects to remain with EMC for the future.

When asked during the call about previous comments that he planned to retire in or near February of 2015, Tucci said the EMC board of directors gave him a contract that ends in February, but that he could be with the company for some time, and at some time may transition to what he called an "involved" chairman position.

"I don't want, and the board agrees, to put another date with another contract," he said. "I'm serving at the will of the board, the will of the employees here, and, of course, the will of our shareholders. And I'm really excited about our opportunities and our prospects."

During the financial conference call, EMC confirmed a CRN report that the company has combined its VCE and VSPEX business into a new converged infrastructure business unit, as well as the CRN report of a new EMC hyper-converged infrastructure appliance expected to be unveiled by the new business unit next week.

EMC CFO Zane Rowe told investors about the importance of the EMC Federation, including EMC Information Infrastructure, Pivotal and VMware, and the ability of EMC to develop solutions using components from all three.

"This integrated solution capability opens up the opportunity for large, $100-million-plus long-term opportunities with customers that would be more difficult to address separately," Rowe said. "Look for us to roll out several new solutions here as well."

David Goulden, CEO of EMC Information Infrastructure, unveiled the new business unit during the call.

"VCE is now the foundation of our converged infrastructure business unit, which now includes VCE, VSPEX, Vblocks and new products like the ones Zane mentioned, which you will hear about next week. ... Our market lead in converged infrastructure in both integrated systems and reference architectures is a key strength as we look forward," Goulden said.