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EMC reports third-quarter loss and more job cuts

Data storage vendor EMC has reported a loss of almost £700m in its third quarter, the company's first loss in over 12 years.

The company's chairman, Mike Ruettgers, pointed to the IT spending slowdown and the company's launch on 10 September of a new line of its high-end Symmetrix Enterprise Storage systems and software as an untimely blow to revenue.

"The next day, the world changed," Ruettgers said. "The focus of many of our customers and employees turned to assisting those affected by the tragedies."

But analysts have said that increased competition from vendors including Compaq, Hitachi and IBM had also affected the company's bottom line.

EMC's president and chief executive officer, Joe Tucci, said that the redundancies and other cost-cutting measures announced in the second quarter had achieved savings of $58m (£40m) in operating expenses in the third quarter. The company also announced that it would cut 4,000 jobs by the end of the year .

Once those cutbacks are complete, EMC's workforce will have been reduced to 19,000 people.

"This is good progress, but it is not enough in the current environment. We expect that our expanded cost cutting will yield ongoing annual cost-savings of about $800m (£553m) by the middle of next year," said Tucci.

EMC took a $825m (£571m) restructuring charge in the third quarter, reporting total revenue of $1.21bn (£837,500m), 47% less than the $2.3bn reported a year earlier.

Tucci said the 11 September attacks also highlighted the need for business continuance solutions in addition to traditional disaster recovery capabilities.

"EMC's longtime leadership in providing the highest levels of business continuance has never been more relevant," he added.

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