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EMC restructuring plan will cut 1,004 jobs

Latest retooling spurred by cloud computing, Big Data

EMC Corp., the Hopkinton data storage giant, has disclosed that a broad restructuring will result in the elimination of 1,004 positions.

The cuts, the company said in a recent securities filing, are part of an $80 million cost-reduction initiative announced earlier this year to retool much of the company, so it can better handle fundamental changes in the technology sector, such as the shift to storing huge quantities of data with Internet­ cloud computing services and advancements in database analytics known as Big Data.

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“EMC has had some concerns about staying relevant,” said Krista Macomber, an analyst at Technology Business Research Inc. in Hampton, N.H., who was attending the annual EMC customer conference in Las Vegas this week.

The plan will affect business units across EMC’s vast global structure, such as its RSA security division in Bedford. The company has a workforce of about 60,000.

VMware Inc., a Palo Alto, Calif., business software company of which EMC is majority owner, is undergoing a similar restructuring that will result in the loss of some 800 positions.

EMC, which has a market capitalization of almost $50 billion and is one of the state’s biggest employers, eliminated 1,163 positions last year as part of a separate restructuring.

The current restructuring is part of a longstanding practice by EMC to continually retool its workforce and business focus, spokeswoman Lesley Ogrodnick said.

“As EMC has been transforming our business, we have had ongoing rebalancing efforts,” Ogrodnick said.

“This most recent one, which was disclosed on Jan. 29, 2013, is relatively consistent with these actions to rebalance and reorganize our workforce to best align with the opportunities ahead.”

Overall, she said, EMC plans to “end 2013 with more employees than we had at the beginning of the year.”

Macomber, the TBR analyst, suggested that the change in job count is owed in part to EMC’s spinning out a new stand-alone company in April known as Pivotal, so that those employees are no longer on its payroll. Pivotal is a provider of cloud storage services that EMC and VMware created to compete with rivals such as Amazon Web Service Inc., the business arm of the giant online retailer.

EMC and VMware pulled talent from both companies to form Pivotal, which is now run by a former VMware and Microsoft Corp. executive, Paul Maritz.

In many ways, EMC is redoubling efforts to stay relevant in a period of increased competition for its customers, from both large established concerns such as Microsoft Corp. and technology start-ups from numerous disciplines.

Since EMC is such a big player in providing business computing and storage services, and has longstanding ties with many businesses interested in using big data and cloud services, Macomber said the company is well positioned to take advantage of these “really hot emerging areas.”

EMC reported first-quarter revenue of $5.39 billion, 6 percent higher than in the same quarter of 2012.

Its stock closed at $23.12 on Tuesday, down 0.73 percent from the previous day.

Michael B. Farrell
can be reached at
michael.farrell@globe.com.
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