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EMC warns, cuts staff
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September 20, 2001: 8:28 p.m. ET
Computer storage maker to slash 8% of global work force, sees 3Q loss
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NEW YORK (CNNfn) - EMC Corp. said on Thursday it plans to eliminate more than 2,000 jobs and warned that its third-quarter earnings will be lower than anticipated due to a drastic slowdown in technology spending.
EMC, the world's biggest data-storage systems maker, said it would report a third quarter loss instead of the profit Wall Street had expected as it copes with a widening recession in technology spending.
"The business world is simply covered in a blanket of hesitation," said Joe Tucci, EMC's president and chief executive.
"This will likely be the first of many in the tech sector to warn," said Crowell Weedon analyst James Ragan, who tied the news in part to last week's hijackings which paralyzed much of the U.S. economy.
EMC (EMC: Research, Estimates) said it would cut about 8 percent of its global work force and take a charge of undetermined size in the third quarter.
Wall Street analysts, polled by earnings tracker First Call, had expected EMC to earn a penny per share in the third quarter, down from a profit of 20 cents per share a year ago.
Revenue at the once fast-growing firm had been seen falling to $1.8 billion from $2.3 billion a year ago.
"EMC's cost reduction efforts will be sweeping in scope, encompassing our workforce, real estate, certain inventories, and other areas," said Tucci.
EMC was one of the last major technology companies to feel the technology spending slowdown, but it has steadily pulled back expectations.
The Hopkinton, Mass.-based company had warned previously on its second-quarter earnings prior to its earnings announcement in July.
EMC Chairman Mike Ruettgers blamed the economy for the firm's problems.
"There is a great and wide ripple effect happening throughout the world that continues to lengthen this technology spending recession. Each corporate layoff and spending curb tends to have a multiplier effect within the economic food chain," he said.
EMC shares gained 2 cents on the New York Stock Exchange to close at $12.62 before the results warning.
-- from staff and wire reports 
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