EMC To Lay Off 1,350 WorkersEMC To Lay Off 1,350 Workers

EMC Corp. continues to struggle with a stingy customer base and an expensive core product that drains cash. In anticipation of third-quarter results that will be formally reported next week, the storage vendor says it will have to lay off 1,350 people. Customers are sure to pay attention to customer and product support after 7% of the workforce is put out on the street.

Before special items, EMC says it expects a loss of 2 cents per share, compared with a 1-cent-per-share profit in the same quarter last year. Joe Tucci, EMC's president and CEO, says the IT market continues to be "brutal" but that the quarter was going better than expected until late September. Tucci says the economy and the geopolitical environment are stalling IT investments.

EMC won't say it, but its mighty Symmetrix storage system and its huge installed base have hurt the company. Symmetrix margins have eroded, as customers are lucky to pay a nickel per megabyte. But to maintain and upgrade the system that stores data for many of the world's largest companies, EMC spends most of its $800 million of R&D per year. At the same time, its platform for growth, the Clariion line, is built out of commodity components.