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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: RR who wrote (37613)	6/7/2001 5:14:01 PM
From: stockman_scott	Respond to of 65232

An interesting email from EMC's CEO to the troops around the world... <<EMC CONFIDENTIAL To: All EMC Employees From: Joe Tucci Date: May 29, 2001 Subject: Growth and Costs It's hard to pick up a newspaper or turn on the TV without hearing new speculation about the extent of the economy's problems and the prognosis for recovery. One day the signs are good, the next day there is more gloom and doom. In our business, we are seeing encouraging signs of customers' IT budgets firming up in some places while still being rationalized in others. Over the past few years, EMC has sped through a period of unprecedented growth and profitability. We have more than doubled both our revenues and the size of our employee population in less than three years. In doing so we have opened up a big lead in the most promising part of the IT market, and Wall Street rewarded us with one of the greatest runs any stock has ever experienced. Few major companies have ever grown as rapidly or become as big in so short a period of time. But rapid growth inevitably carries a downside, which is difficult to see while it's happening -increasing spending patterns that result in a cost structure that can become unhealthy if growth slows. This spending is committed with the best intentions, but when the economy forces you temporarily into a slower rate of growth, it really begins to show. We can all think of examples - everything from hiring too quickly and compromising our standards to sending more people than needed on a business trip, from too many big black cars and logo golf shirts to overuse of consultants and cell phones. If we all spent the company's money as if it were our own, EMC would be an even stronger company. We have been taking a number of steps to lower our cost structure to better reflect our expected 2001 revenue growth rate. We must do this while ensuring that we continue to invest in extending both our technology and market share lead, in maximizing stockholder value, and remaining one of the best and most rewarding places to work. Our senior management team will outline specific steps for each respective organization, and I expect full cooperation in implementing them efficiently and fairly. The most difficult and painful element of cost reduction comes when we are forced to eliminate jobs. Regretfully, we will reduce the size of our worldwide employee population by about 1,100 people, or about 4%, over the course of the next several weeks. This will leave us with about the same number of employees we had when the current year began. Several hundred more people will be redeployed into quota-carrying sales positions. Employees affected by this reduction will receive fair severance packages and other benefits. Everyone will be treated with dignity. We appreciate the work they have done to help get EMC to the leadership position we are in today. After the hypergrowth of the dotcom bubble, nearly every major IT company has been forced by a slowing economy to reduce its workforce in recent months. At Cisco, the number is 8,500 people. At Intel, 5,000. Dell is cutting 4,000, HP nearly 5,000 and Compaq 7,000. Just as EMC's business has been less severely affected by the slowdown than virtually any other large vendor's, we have been able to avoid the deep job cuts experienced by others. The reductions are being implemented in a number of areas throughout EMC, with particular focus on eliminating redundancies and overlaps in certain field operations, trimming the size of several corporate functions, and continued reduction of the resources supporting the managed decline of the server business inherited with the 1999 acquisition of Data General. Other cost-cutting measures include reducing the use of consultants and contractors, lowering travel expenses and delays in some facilities expansion. This activity includes the elimination of some costs that were built in anticipation of higher 2001 revenue growth, before the impact of the slowing economy and the disintegration of many Internet-related companies that had been making substantial information infrastructure investments throughout 2000. Aggressively reducing costs in many areas helps us avoid letting more people go than we absolutely have to. We will also be increasing the number of quota-carrying sales representatives and systems engineers around the world to help address our large available market and serve our customers, through both new hiring and redeployment. We will continue to increase our investments and do selective hiring in engineering and customer service, as well as investing heavily in our internal information technology and looking for talent enhancement opportunities in several other strategic areas. Regardless of the economic hesitation, the opportunity in front of us is still the most promising in all of IT. I wouldn't trade places with any other company. I am absolutely convinced about two things: EMC's leadership position in information storage is significant and growing; and leaders are always in a much better position than their competitors to use economic slowdowns to their advantage. To take advantage of this opportunity, we must intensify our efforts on the expense side of the equation to complement the tremendous energy we are putting into the growth side of the equation. I am certain you will rise to the challenge. Thanks to all of you for your continued hard work and dedication to EMC. Joe>> theregister.co.uk