Hitachi cuts work force by 10%--a "rising star in the data-storage industry" indeed.
Hitachi Data Systems Cuts 10 Percent of
Work Force
By Tim McLaughlin
BOSTON (Reuters) - Hitachi Data Systems,
a rising star in the data-storage industry, has
cut 10 percent of its work force in a reduction
that claimed some top executives as it battles
industry heavyweights EMC Corp. and IBM
Corp.
Christine Wallis, vice president of Hitachi Data's global strategy and
planning, confirmed the percentage of job cuts in a telephone interview with
Reuters on Tuesday. She declined to give a specific number.
``We had to make a minor correction,'' Wallis said. ``Ten percent in this economy is not so bad.''
[Right.]
Company insiders said the eliminations ranged from 200 to 300 people. The company did not make a
public announcement.
Shebly Seyrafi, an analyst with A.G. Edwards, said Hitachi Data is feeling the effects of a pricing war
with data-storage leader EMC (NYSE:EMC - news) and International Business Machines Corp.
(NYSE:IBM - news) in the high-end market for machines that store computer network traffic
generated by banks, airlines and government agencies.
Nevertheless, he said Hitachi Data is outgrowing its larger rivals, although from a smaller base.
Among those leaving the unit of Japan's Hitachi Ltd. (6501.T) were senior executives Ron
Gervenack, who retired, and John Lovejoy and Clive James, who were part of the company's
reduction in force, company insiders said. Wallis confirmed all of those people have left the company.
Gervenack was vice president and general manager of corporate storage products; Lovejoy was chief
information officer; and James was vice president and general manager of the original equipment
maker unit.
In a separate move, Hitachi Data quietly named a new chief executive officer, Shinjiro Iwata, in
September. Iwata replaced Jun Naruse, who returned to Japan after being handpicked for an
assignment by Hitachi's chairman, said Wallis.
``It's very, very usual in Japanese companies for senior executives to be rotated through a variety of
positions,'' Wallis said.
Seyrafi said he was not worried about the management changes at Hitachi Data because key
executives still remain at the Santa Clara, California-based company. He noted that Chief Operating
Officer Dave Roberson remains at the company and is Hitachi Data's ``real hands-on manager.''
The job cuts came the same week parent Hitachi Ltd. lowered its forecast for its data storage
business to $2 billion from $2.5 billion for the fiscal year that ends March 31.
``They've been very aggressive price-wise,'' said Greg Eden, a spokesman for EMC. ``I think they're
feeling the pressure, feeling that pain.''
But so are EMC and other data-storage firms. Hopkinton, Massachusetts-based EMC, for example,
reported a net loss of nearly $1 billion in the third quarter as it works to cut costs in the face of
shrinking revenue. |
