Listen to this article
Shares of EMC, the world’s biggest data storage equipment maker, fell as much as 6 per cent on Tuesday after the company reported a drop in net profit and lowered its earnings forecast.
The slide came as the company announced plans to cut more than 1,200 jobs in an attempt to streamline its business following acquisitions in recent months.
“These actions, while difficult, are necessary,” said Joe Tucci, chief executive. “Customers are asking us to approach them more as a single, integrated partner and to streamline some of our processes.”
Mr Tucci said the restructuring would focus on management and back-office operations. EMC said it expected the changes to result in a charge of $150m and $175m in the fourth quarter.
EMC reported earnings of $283.7m for the third quarter, or 13 cents a share, compared with a profit of $422m, or 17 cents a share, a year earlier, with most of the difference driven by charges related to options expensing.
Looking ahead, the company said it expected revenues in the fourth quarter of $3.16bn, including $110m from recent acquisitions.
EMC’s shares closed down 4.2 per cent at $12.29.