EMC fires hundreds, not cutting costs
- 13 February, 2001 10:18
Storage industry leader EMC confirmed Monday that it dismissed hundreds of workers last week, but the company said the move was part of a stringent and ongoing employee review process and doesn't indicate that it's looking to reduce internal costs.
EMC officials wouldn't specify the number of employees who were let go beyond saying that "several hundred" workers lost their jobs. But company spokesman Mark Fredrickson said the across-the-board cuts reduced EMC's 24,000-person workforce by less than 3 per cent, which means as many as 700 people could have been affected.
According to Fredrickson, the dismissals were determined by department heads who regularly review the skills and performance of employees. It had nothing to do with the vendor's financial performance or its competitive position.
"We're not seeing a slowdown at all in our business," Fredrickson said. "I think we just manage the company more tightly than other people do [at] all times. It's attracting attention now [because of] our sheer size." The cuts made last week were proportionate to ones that EMC has made in previous years, he added.
Fredrickson also noted that an annual 10 per cent attrition rate in the company's sales force decreased last year, which he chalked up mainly to the business problems that have hit many dot-com ventures. And he attributed some of the publicity surrounding last week's cuts to Internet chat rooms that give dismissed employees a chance to vent.
EMC last month reported a net profit of $US563 million for the last year's fourth quarter, up 49 per cent from the same period in 1999. Fourth-quarter revenue rose 40 per cent on a year-to-year basis, coming in at $2.62 billion.
Despite the cuts, Fredrickson said EMC continues to hire new employees and expects to finish this month with more workers than it had at the end of January. For this year as a whole, he added, the company is forecasting a net increase of about 7000 employees. "We hired 6000 last year," Fredrickson said. "So the business is growing very rapidly."