EMC Announces Record Revenue, Job Cuts

Data storage company EMC(EMC Quote) announced record quarterly revenue in its preliminary fourth-quarter results late Wednesday but also revealed plans to cut 2,400 jobs as part of a major restructuring effort.

Despite the spending slowdown that has troubled much of the tech sector, EMC announced preliminary results in line with both its own estimates and Wall Street's predictions. The news pushed EMC's shares up 60 cents, or 5.37%, to $11.78 in extended trading Wednesday.

The Hopkinton, Mass.-based firm will report record quarterly revenue of $4 billion later this month, a 4% increase on the year-ago quarter, and just above analysts' estimate of $3.96 billion.

On a GAAP basis, EMC will post earnings of between 13 and 14 cents a share, although this includes a restructuring charge of 10 cents a share.

Excluding the restructuring charge, the firm will report earnings between 23 cents and 24 cents a share, in line with analysts' expectations.

EMC, which competes with Network Appliance, Hewlett-Packard(HPQ Quote), IBM(IBM Quote) and privately held DataDirect Networks, also outlined a major restructuring effort to streamline its Information Infrastructure business, which encompasses storage, security, content management, and archiving. The restructuring, which does not affect EMC's VMware(VMW Quote) subsidiary, is expected to reduce the company's costs by around $350 million in 2009 and approximately $500 million in 2010.

As part of this effort, EMC is looking to reduce its 33,000-plus workforce by 2,400. That effort should be largely complete by the end of 2009. The firm has also suspended any planned salary increases for this year, and CEO Joe Tucci and the rest of EMC's senior leadership will be taking a pay cut, according to a statement released Wednesday.