Storage vendor downsizes its business in a bid to get back on track.
John Geralds in Silicon Valley, vnunet.com10 Aug 2001
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Portable storage vendor Iomega is to lay off up to 1250 staff worldwide and take a third-quarter restructuring charge because of declining sales.
Werner Heid, the company's recently appointed chief executive, said on Thursday that the goal was to bring expenses in line with revenues. The lay offs and associated expenses in downsizing the business will cost the company between $55m and $65m, but Iomega said it will then be on track for profitability in 2002.
Best known for its Zip and Jaz drives, Iomega warned less than a month ago that it would cut its 3300-strong workforce by between 800 and 1100.
The company has identified those workers to be made redundant of which there are approximately 780 in North America, 90 in Europe and 380 in the Asia Pacific region.
Heid said in a conference call that the number of job losses was growing because "the market is very depressed".
On 19 July Iomega reported a net loss of $35.9m for the second quarter 2001, compared with a profit of $40.4m in 2000. Revenues were $184.1m, a decline of $119.5m from $303.6m in 2000.
The cause of the revenue shortfall was poor sales of its Zip and Jaz drives.
Data management company Iomega has dropped Ideal Hardware as a distribution partner. Iomega, which last week launched a new range of 3.5in magneto optical drives, ended the partnership last month. 02 Mar 2001
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