EMC Corporation to Downsize, Cut Costs Prior to Dell Acquisition
January 1, 2016
EMC Corporation (EMC) is planning to downsize and cut costs prior to its acquisition by computer hardware and cloud company Dell. EMC, which has headquarters in Hopkinton, Massachusetts, United States, specializes in computer data storage solutions alongside information security, virtualization, analytics, and cloud computing offerings. The company aims to reduce costs by as much as $850 million and the layoffs will cost the company $250 million in severance.
EMC submitted regulatory paperwork and had its downsizing plans approved last week. The bulk of the jobs will be lost within the first quarter of 2016, with the remainder lost through to the close of the year. The company’s acquisition by Dell was finalized in October last year with Dell committing $67 billion to the purchase - after the acquisition the resulting business will have a value of around $75 billion.
“On December 30, 2015, as part of the previously announced program to reduce our existing cost base by $850 million annually, and consistent with prior restructuring actions to keep pace with changes in the industry, EMC Corporation management approved a restructuring plan,” suggested EMC’s filing. “The plan consists of a reduction in force which will be substantially completed by the end of the first quarter of 2016 and fully completed by the end of 2016. The total charge resulting from this plan is expected to be approximately $250 million, with total cash payments associated with the plan expected to be $220 million”.