IT hardware, software and services provider EMC has announced plans to cut approximately 2,400 jobs as part of a restructuring program to reduce costs by approximately $350m in 2009 and $500m in 2010.
It said it will also consolidate back-office functions, field and campus offices, rebalance investments toward higher-growth products and markets, reduce management layers, and reduce spending on contractors, third-party services, and travel.
It will incur a pre-tax restructuring charge of $248m in the fourth quarter 2008 and expects to incur additional pre-tax restructuring charges of $100m to $125m across 2009 and 2010. It also expects non-recurring, pre-tax transition costs of approximately $75m to $100m.
Joe Tucci, chairman, president, and chief executive of EMC, said: We managed our costs and investments very carefully throughout 2008. However, we believe this additional program will help us strike the right balance between achieving higher levels of efficiency and sustaining strong business agility and performance. Our goal is to position EMC for continued success throughout the downturn and for even greater success during the next economic growth cycle.
In October 2008, the company reported a 17% decline in net income to $411.27m for the third quarter 2008, compared to $492.92m in the year-ago quarter, on revenue up 13% at $3.71 billion. The company expects revenue growth of 4% year-over-year to $4 billion and diluted EPS between $0.13 and $0.14 for the fourth quarter 2008.
