EMC's cutbacks: A bit more to the story
Storage titan EMC [announced](/storage/article.php/3795066/EMC+Trims+Staff+Levels+Despite+Record+Revenues.htm) layoffs last week, citing cost-efficiency as the primary reason.
What it didn't announce, as clearly, was that CEO Joe Tucci and senior executives are taking a pay cut and also foregoing bonuses for 2009.
Oh, and one more thing -- EMC is freezing employee pay as well with no salary or bonus increases coming in the near future.
This was all confirmed this morning by an EMC spokesperson.
The problem I have is that neither economic move was mentioned specifically in any release I saw or read last week in writing about the layoffs. It's also not in an SEC document, as yet, as that doesn't have to be filed until the company's year end.
A 7 percent workforce cut, in these economic times, isn't mindblowing. The macroeconomics are finally hitting the storage sector - about a year after hurting lots of other technology segments. Everyone is slashing payroll -- heck even Microsoft was rumored to be laying off by the end of 2008.
And trying to reduce costs, trim operations, restructure an organization that is merger-manic (EMC had something like 21 acquisitions in the past few years) is just smart business.
But senior level pay cuts?
A CEO taking a salary reduction and kissing goodbye a bonus?
That's exactly what Motorola announced before the holidays remember? And we all know that isn't about just shoring up the financials.
So EMC's similar moves seem to be a little bit more than just cost-efficiency to me, though I am the first (as my editors will attest) to acknowledge I'm no financial wizard.
I asked for specifics on the senior level pay cuts and bonus loss. No numbers forthcoming. I asked what the no-raise for 2009 will save. No answer.
What I got was Tucci and his executive staff are "leading" from the front when it comes to financial moves.
Maybe the storage sector is getting hit harder than many thought. We'll find out soon enough.