Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : IBM -- Ignore unavailable to you. Want to Upgrade?

To: Elroy who wrote (7709)	6/18/2002 11:05:06 AM
From: Arrow Hd.	Read Replies (1) \| Respond to of 8218

I suppose we could argue over what "lean" means and in the context that you propose then I would agree that EMC and SUNW are not as "lean" as LU/NT/JDSU but they are "more lean" than they have been and are moving back towards profitability. I also take a different view regarding head-count reductions. When a company reduces their head-count 50% that is draconian and debilitating. There is no way that 50% represents fat. A cut of that magnitude takes a company beyond the "food and shelter" levels into a "life support" mode. Even the 20% cuts you mention for EMC and SUNW are troubling. From an "IT Executive" view, I would much prefer to weather an economic downturn with a few quarterly losses and protect the majority of my intellectual capital than rape and pillage my personnel in the name of some small pro-forma gain. It is my opinion that EMC and SUNW (and IBM) will recover quicker than companies like LU/NT/JDSU who are in pure survival mode and in a weaker sector which is Telcom. In a constantly changing IT landscape, an IT company can probably roll-over 5 to 10% of their employee base every 18 months or so. Someone on this thread mentioned the evolution of aluminum to copper chip technology as an example. You either transition the "aluminum" assets in people and plants or you eliminate it. I would like to think that is what EMC and SUNW are doing but with a sharper knife. Those in the Telcom sector are in radical surgery. Many of these companies will survive and in a Telcom rebound will represent multi-baggers in their own right but they will be different companies. Much more so than EMC or SUNW, not because that is better necessarily, but because they had to due to radical surgery, and in my mind that puts them further down on the investment food chain because of the inherent risk involved. Only an opinion of course,