Despite an infusion of $US825 million last month from the sale of its disaster recovery business, Comdisco said it still must make further cutbacks to keep the company afloat.
In an announcement yesterday, Comdisco said it would cut another 10 per cent of its workforce by the middle of February.
"While we've made considerable progress in our Chapter 11 restructuring efforts, such as the sale of our Availability Solutions business on November 15, and the ongoing sales evaluation process for our leasing businesses, it's clear that we need to continue to cut costs and improve our efficiency," Norm Blake, Comdisco's chairman and CEO, said in the statement.
The company and its 50 US subsidiaries filed for Chapter 11 bankruptcy protection in July, sparking a battle between Hewlett-Packard and SunGard Data Systems for Comdisco's disaster recovery unit.
The US Department of Justice fought the sale because SunGard, Comdisco and IBM were the only major disaster recovery vendors, and such a sale would narrow that field to two. Judge Ellen Segal Huvelle of the US Circuit Court of Appeals for the District of Columbia ruled, however, that the sale could go forward.
Comdisco's business units outside the US weren't included in the bankruptcy proceedings, and all units still within the company are continuing operations.
The reorganisation won't be complete with this layoff, either. According to the company, further action may include "the potential sale of all or some of its leasing businesses, as well as the restructuring of its Ventures group. The company has targeted emergence from Chapter 11 (bankruptcy protection) during the first half of 2002."
Comdisco now has 1,272 employees worldwide, 680 of them in Illinois. The cutbacks are proportionate to the workforce distribution, with a little more than half of the layoffs coming from the greater Chicago area, according to the announcement. The rest will be spread among other offices around the world.
Affected employees will be given severance, training workshops and on-site placement assistance, the announcement said.