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EMC's Irish operation is waiting to see whether it will escape job cuts following the company's announced plans to reduce its global workforce by 10 percent.
The storage systems and software company said on Friday that due to the current economic slowdown it would need to generate USD1.8 billion in revenue to break even for the third quarter. As a result, it will be cutting 10 percent of its workforce by year-end as part of a cost reduction effort that will be "sweeping in scope." The company currently employs over 23,000 people worldwide.
EMC employs more than 1,500 people in Ireland, with the vast majority of the jobs at its facility in Ovens, Co. Cork. A spokesperson for EMC told ElectricNews.Net that it was waiting for a directive from the US regarding any possible impact here. "It was a preliminary forecast and we just don't know at this time how it is going to affect the Irish operation, if at all," said the spokesperson. She added that a decision is unlikely to be made until the company's final earnings are released. They are due at the end of September or in the first week of October.
The Cork facility is the home of EMC's international operations including its Technology Centre, the International Executive Briefing Centre, the Internet Services Group and its Worldwide Customer Service Centre. The Cork operation was established by EMC in 1988 and was the company's first manufacturing facility outside of North America. It is understood that EMC has invested more than USD400 million in its Irish operation during that time.
However, a positive sign for the Irish operation is that it escaped the last round of job cuts announced by the company earlier this summer. The Cork facility is also said, by a source close to the company, to have been busy over the last few months.
In July of this year, EMC announced a 75 percent drop in earnings to USD0.05 per share for the second quarter of 2001. This compared with earnings of USD0.19 per share for the second quarter of 2000.
"I cannot recall a more difficult environment in terms of technology spending than the one that has unfolded over the past few months," said EMC's executive chairman, Mike Ruettgers, at the time. "The global economic environment has become much tougher. It is now expected that IT spending may shrink on a year-to-year basis for the first time in decades."
Analysts have said they expected the company to earn USD0.01 a share for the third quarter of 2001. This compared to earnings of USD458.2 million, or USD0.20 a share, on revenue of USD2.28 billion, for the third quarter 2000.
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