News
StorageTek Reports Third-Quarter Loss, Will Cut 1,500-1,750 Jobs
- By Scott Bekker
- October 28, 1999
Storage Technology Corp. (StorageTek,
www.storagetek.com) has announced that due to significant third-quarter losses, the company will begin a major restructuring plan resulting in the loss of 1,500 to 1,750 jobs. The program is intended to enhance operating performance and reduce operating expense through recommitment to tape automation, virtual storage and storage area networks, simplification of the company's sales model, and reorganization of its infrastructure.
The company says that restructuring should result in annual savings of up to $150 million. The elements of the first phase of restructuring will start immediately and are scheduled for completion by the end of the second quarter of 2000.
The company will reduce investment in its solutions business group, which includes consulting and integration services, managed storage services and vertical and horizontal application solutions. Commitments to existing customers will be met, but new business will not be sought except in the SAN and virtual storage businesses where consulting is integral to the market development process.
StorageTek's products revenue of $355.7 million was 7 percent lower than the third quarter of 1998. Tape revenue increased over the third quarter last year, but disk revenue was down in the same quarter. The company reported a net loss for the quarter of $.16 per share, or $16 million.
About the Author
Scott Bekker is editor in chief of Redmond Channel Partner magazine.