EMC reported third-quarter results for 2001 that include a 47 percent drop in sales and a loss of nearly $1 billion. Analysts attribute the sales decline to the weakening economy and EMC's failure to react to market changes. EMC has continued to try to sell its expensive, high-end storage devices to customers in a market suddenly flush with less expensive offerings. EMC's quarterly revenues dropped to $1.21 billion, compared to $2.3 billion for the same quarter a year earlier.
EMC's $945 million loss this quarter includes an $825 million restructuring charge, which itself includes charges for job cuts, excess inventory, plant closings, and investment writedowns. EMC plans to eliminate 4000 jobs, which will bring its workforce down to about 19,000 employees.
With its stock down 90 percent this year, EMC hopes that a new alliance with Dell will help resuscitate growth. The 5-year deal with Dell, which both companies estimate to be worth billions, lets Dell resell cobranded EMC products. Dell will become the leading reseller of EMC's CLARiiON product line, which Dell will now offer as its standard for Storage Area Networks (SANs) and high-end Network Attached Storage (NAS) installations. The products will come cobranded with Dell and EMC's names.
As the world's number-one PC maker, Dell hopes this alliance will help it become more competitive in the tightening enterprise computing market. The companies didn't release the financial terms of the deal.