EMC Plans Layoffs, New Hires In Wake Of Strong Revenue, Earnings Growth

EMC on Wednesday reported very strong revenue and earnings growth for its fiscal fourth quarter and full year 2013, but tempered the news with plans to lay off a number of employees as part of an internal restructuring.

However, EMC said that restructuring is consistent with past moves that actually resulted in increased head count, a situation likely to be repeated in 2014.

EMC, in an SEC filing dated Tuesday but made available Wednesday, wrote that EMC management on Tuesday approved a restructuring plan calling for a reduction in head count to be done mainly in the first quarter of 2014 and finished by late 2014.

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The company declined to spell out details of where the layoffs would happen, or how many would be let go.

According to an EMC solution provider, however, the layoffs are focused on people who sell EMC's noncore products as the company moves the sales of some of its ancillary products to its core pre-sales personnel.

The Boston Business Journal reported that EMC cut about 1,000 jobs during its 2013 layoffs.

EMC, in a statement emailed to CRN, said the layoffs are part of a regular rebalancing effort, and will likely result in the company hiring as many new employees, or more, compared to the layoffs.

"For the last couple years, as we've been transforming our business, we have had ongoing rebalancing efforts. This most recent one, which is roughly similar in size, is consistent with these actions to rebalance and reorganize our workforce to best align with the opportunities ahead. After factoring in the rebalancing in 2013 we still ended 2013 with about 2,000 more employees. EMC intends to end 2014 with the same number, or slightly more, employees than we had at the beginning of the year," the statement read.

For the fourth quarter, which ended Dec. 31, EMC reported revenue of $6.7 billion, up 11 percent compared to last year's fourth-quarter revenue of $6.0 billion.

GAAP income for the quarter was reported as $1.0 billion, up 17 percent over last year's $870 million. That includes income of $68 million from EMC's ownership of VMware, which Tuesday reported its 2013 financials.

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On a non-GAAP basis, income was $1.3 billion, up 7 percent over last year. EMC also said GAAP earnings rose 23 percent over last year to reach 48 cents per share, while non-GAAP earnings hit 60 cents per share, up 11 percent.

For all of 2013, total EMC revenue hit $23.2 billion, up 7 percent compared to full year 2012's revenue of $21.7 billion. EMC saw growth across the board, with revenue for its Information Infrastructure business up 5 percent year-over-year, while its VMware and Pivotal businesses both grew 15 percent.

GAAP income for all of 2013 hit $2.9 billion, including $204 million from VMware. That was up 6 percent over the $2.7 billion EMC reported for full year 2012. On a non-GAAP basis, income was reported to be $3.9 billion, up 4 percent. GAAP earnings for all of 2013 hit $1.33 per share, up 8 percent, while non-GAAP earnings hit $1.80 per share, up 6 percent.

The North American market was kind to EMC, with sales in the fourth quarter up 11 percent and for the full year up 6 percent. EMC's Europe market recovered in the fourth quarter, with sales there up 15 percent over last year. Sales to Latin America rose 17 percent in the fourth quarter, but sales in Asia rose only 1 percent.

EMC's shares were down about 36 cents, or 1.4 percent, by the middle of the trading day Wednesday.

PUBLISHED JAN. 29, 2014