EMC is restructuring its operations to save about $350-million in costs during 2009, and a further $500-million in 2010. This is despite reporting record quarterly revenue for the fourth quarter of about $4-billion.
This revenue represents an 8% growth over the third quarter, and a 4% growth over the fourth quarter a year before.
"We are very pleased with our preliminary Q4 financial results," says Joe Tucci, chairman, president and CEO of EMC. "We were able to generate all-time record revenue and strong sequential revenue growth against the backdrop of a challenging global economy.
"Customers are telling us that information infrastructure and virtualization products and solutions are at or very near the top of their IT spending priorities. This, coupled with the technological advantage and quality of EMC's solutions and the strength of our sales and service organizations, helped us achieve our Q4 financial goals."
EMC also announced a restructuring programme to streamline the costs related to its information infrastructure business, which does not include VMware, cutting costs by $350-million in 2009 and $500-million in 2010..
The programme's focus is to consolidate back office functions, field and campus offices; rebalance investments towards higher-growth products and markets; reduce management layers; and further reduce indirect spend on contractors, third-party services and travel.
The restructuring programme will reduce EMC's global information infrastructure workforce by about 2 400 positions, or about 7% of its headcount.
"We managed our costs and investments very carefully throughout 2008," Tucci says. "However, we believe this additional program will help us strike the right balance between achieving higher levels of efficiency and sustaining strong business agility and performance, without in any way compromising our ability to serve the needs of our customers over the long-term."
The programme's expected savings will come from both cost reductions and the transformation of several areas of EMC's operational cost structure.
As part of the programme, EMC is undertaking several initiatives to transform the structural efficiency of how it operates worldwide. These initiatives will include the consolidation and movement of various facilities and processes beginning in 2009 and to be completed by the end of 2010.