Layoffs loom at EMC

Company plans to eliminate 1,250 jobs

Even as EMC Corp. expands beyond network storage technology into security, virtualization and content management, it is preparing to cut as many as 1,250 jobs.

Today the company reported third-quarter net income of $283.7 million, or 13 cents per diluted share, on revenue of $2.82 billion for the three months that ended Sept. 30, exceeding analyst estimates of 12 cents per share on revenue of $2.67 billion.

The results matched the earnings of 13 cents per diluted share in the third quarter of 2005 for the Hopkinton, Mass.-based company, on revenue of $2.37 billion. However, in the year-earlier quarter, EMC's net income was $421.7 million.

EMC plans to eliminate 1,250 jobs as it consolidates operations in the wake of 21 acquisitions it has made in the past three years. EMC plans to take pretax charges of $150 million to $175 million in the fourth quarter, or about 6 cents per share, to cover the cost of the consolidation.

The data storage company has expanded into virtualization technology with its acquisition of VMware Inc. and network security with its $2.1 billion acquisition of RSA Security Inc.

EMC forecasts fourth-quarter earnings of 9 cents a share on revenue of $3.16 billion.

Copyright © 2006 IDG Communications, Inc.

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