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EMC cost cutting fails to bring profit in Q4

EMC cost cutting fails to bring profit in Q4

Cost cutting at EMC has yet to have an effect on its bottom line, as the data storage giant yesterday reported its second consecutive quarterly loss.

EMC reported a net loss of US$70 million, or $0.03 cents a diluted share, for the fourth quarter ending December 31, 2001, the company said in a statement. That compares with net income of $562.8 million, or 25 cents a diluted share, in the fourth quarter of 2000, EMC said.

EMC's revenue in the fourth quarter was down significantly to $1.51 billion, compared to $2.62 billion in the same quarter last year, EMC said.

EMC has been emphasising a push toward interoperability and open standards as well as cutting prices to compete with vendors including Compaq, Hitachi Data Systems and IBM.

EMC said it had "aligned (its) workforce to address the new economic reality" while enhancing the efficiency of the organisation through new systems and processes and had lowered inventories throughout the fourth quarter in an effort to come to terms with increased competition in the data storage market.

EMC reduced its workforce to 19,000 people in 2001. Of the 4,000 layoffs announced in the third quarter, 75 per cent have been completed with the rest to come in its international divisions early in 2002, EMC CEO Joe Tucci said during a conference call, The layoffs were announced as the the company took $825 million in restructuring charges, on total revenue of $1.21 billion, a decline of 47 percent over the third quarter in 2000.


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