Iomega to Slash Its Work Force Amid Weak Sales of Storage Systems
A WALL STREET JOURNAL ONLINE News Roundup
ROY, Utah -- Iomega Corp. posted a second-quarter net loss and said it plans to cut as many as 1,100 jobs amid weak demand for its data-storage devices.
Iomega Warns of Loss for Quarter, Appoints Heid as Chief Executive (June 19)
The maker of Zip and Jaz disks and drives posted a net loss of $35.9 million, or 13 cents a diluted share, which included restructuring and other charges. A year earlier, the company had a profit of $40.4 million, or 15 cents a share.
Sales dropped 39% to $184.1 million from $303.6 million a year earlier.
The company said it will reduce its work force during the second half of 2001 by about 800 to 1,100 persons world-wide, or as much as 31% of its work force, and take a charge in the third quarter. The company also said it will consolidate labor-intensive tasks to Malaysia and relocate its corporate headquarters to the West Coast.
The company's pretax loss of $58.2 million was within the guidance it provided in June, when it said it expected to report a second-quarter pretax loss of between $41 million and $62 million on significantly reduced revenue.
Also, Iomega's board approved a one-for-five reverse stock split. If approved by shareholders, the currently outstanding 273 million shares would be reduced to 55 million. At 4 p.m. Thursday, Iomega shares were at $1.98, up three cents, on the New York Stock Exchange. |
