EMC to lay off workers; Tucci to stay past February
EMC CEO and chairman Joe Tucci indicated Thursday that he will stay on after his contract expires next month. Others at EMC won’t be given that option, as the company also said it will cut jobs to reduce expenses.
Tucci’s contract ends in February, which will be here next week. During EMC’s earnings call Thursday Tucci called that contact “a guidepost” rather than a hard stop. He made it clear that he will stay past that date in his current role, and said he will happily remain chairman of federated EMC companies (including VMware and Pivotal) for a longer stretch. Tucci has already postponed his planned retirement several times.
Tucci said his term as CEO could go on “a couple of quarters or a couple of months. Not years. And I said I would look favorably about staying on as an involved chairman beyond that.”
Earlier this month, EMC reached a standstill agreement with activist shareholder Elliott Management, a hedge fund that had pushed EMC to sell off VMware or reorganize. Elliot helped pick two new members of EMC’s board and promised not to “agitate” EMC until September.
EMC executives did not address the restructuring on the earnings call, but EMC filed an SEC statement before the call that said it will spend $130 million to $150 million on staff reduction. The filing did not say how many employees would be affected but said the restructuring would be completed by the end of March.
EMC’s revenue of $7 billion for last quarter and $24.4 billion for the year both fell slightly below Wall Street expectations, as did its guidance of $26.1 billion for 2015. EMC Information Infrastructure – its core storage business – reported $5.36 billion in revenue, up three percent from last year but also below expectations. High-end storage – VMAX – revenue fell 13 percent to $1.19 billion while emerging storage – XtremIO, Isilon and ScaleIO – rose 52% to $800 million.
EMC executives said XtremIO all-flash arrays pulled in nearly $300 million in revenue for the quarter. EMC II CEO David Goulden called it the fastest growing product in EMC history, and said it had a “commanding lead” with 35 percent of the all-flash market share.