EMC: unspecified number of staff face the chop

Company forecasts lower-than-expected profits and mentions restructuring plan, but CEO Joe Tucci is positive about the launch of six new products

Technology giant EMC is to cut jobs after it forecast a lower-than-expected profit for the year, but CEO Joe Tucci said that he expects the launch of six new products to bring in more than $1bn (£663m) in revenues in the next few years.

Although Tucci did not divulge what the new products would be, he said that they would be focused on cloud, mobile, social and big data.

But EMC staff will be more concerned about the firm's plans to axe a number of employees.

"EMC management approved a restructuring plan," the company said in an SEC filing.

"The plan consists of a reduction in force which will be substantially completed by the end of the first quarter of 2015 and fully completed by the end of 2015," EMC added.

Under a section in the filing headed "Cost Associated with Exit or Disposal Activities", the company says:

"The plan consists of a reduction in force which will be substantially completed by the end of the first quarter of 2015 and fully completed by the end of 2015. The total charge resulting from this plan is expected to be approximately $130m-$150m, with total cash payments associated with the plan expected to be in the range of $120m-$140m."

The company does not specify the number of jobs that might be shed, but in 2013 EMC axed 1,800 employees when management approved a similar restructuring plan.

Expected adjusted profits for 2015 will be $1.98 per share on revenue of $26.1bn, the firm said. However, according to Reuters, analysts have been expecting a profit of $2.13 per share on revenue of $26.21bn.

EMC has four main business units: its data storage division; VMware (of which it owns an 80 per cent share); security vendor RSA; and cloud-computing software provider Pivotal.

The company has been under pressure from activist investor Elliot Management Corp to spin off VMware and to look for merger opportunities. EMC reached an agreement with Elliot in January, in which the investor agreed to refrain from agitating the company until September.