EMC to realign workforce, sets record earnings for '05

06.01.2006
EMC said Friday that it will "rebalance" its workforce by 1,000 employees this year, using the savings from layoffs to hire new workers for sales and marketing. At the same time, the storage vendor announced preliminary fourth-quarter and year-end results that beat its expectations and set a revenue record.

EMC projected that its fourth-quarter revenue will come in at about US$2.7 billion, with consolidated revenue for 2005 expected to be about $9.6 billion. Both results beat the company's earlier expectations.

EMC CEO Joe Tucci said in a statement that the Hopkinton, Mass.-based company saw its 10th straight quarter of double-digit revenue growth "largely because our customers' enthusiasm for information life-cycle management has never been stronger."

But Brian Babineau, an analyst at Enterprise Strategy Group Inc. in Milford, Mass., said that "no one buys information life-cycle management." He said an uptick in product releases in 2005, including EMC's latest high-end Symmetrix array, and Dell Inc.'s continued success reselling EMC's midrange Clariion line of arrays is what boosted the company's revenue.

"And with that momentum ... software falls in behind," Babineau said. "On the software side, you're seeing Legato and Documentum becoming more complementary to each other in moving data between EMC's Symmetrix, Clariion, Centera and even the ADIC tape library that they acquired," he said.

EMC said that on Dec. 30, it approved a plan that would result in "increased focus on new product development and ... the company's ability to target, reach and support more customers around the globe."