What will the EMC sale mean for Massachusetts?
EMC Corp.'s blockbuster $67 billion sale to Texas-based Dell Inc. immediately sparked concerns Monday among some local officials that the combined company might slash its operations in Massachusetts, where EMC has its headquarters and employs 9,700 workers.
"I'm very concerned that Dell's acquisition of EMC Corporation could lead to significant layoffs," said Senator James B. Eldridge, an Acton Democrat who said many of his constituents work at the company. "Given that EMC has already been in a recent cycle of workforce reductions over the past few years, I wonder whether that will be accelerated now that the company has been purchased by an out-of-state owner."
The companies' top executives said Monday that they plan to keep EMC's core data storage business in Hopkinton and will continue to grow the business. But companies typically consolidate some overlapping operations in a merger and it's unclear how committed Dell will be to the state in the long term.
State Senator Karen E. Spilka, whose district includes Hopkinton and Franklin, where EMC also has facilities, said it was a "little sad" to see the state's largest technology company taken over.
"EMC has been such a great corporate neighbor, not only for Hopkinton and Metro West, but for the entire state," said Spilka, an Ashland Democrat. "I think to some extent, it marks the end of the Massachusetts home-grown computer giants."
But Spilka said she was hopeful that Dell will largely maintain EMC's Massachusetts operations.
She noted that the state is one of the leading recipients of venture capital, is a hotbed for startups, and is known for its highly educated workforce.
"It's to Dell's benefit to keep as much of EMC's operations here," she said. "We clearly have a huge talent pool. Dell would be crazy not to recognize that and take advantage of that."
Governor Charlie Baker spoke briefly with EMC chief Joseph Tucci and Dell chief Michael Dell on Monday, and his office was sanguine about the deal.
"EMC has been an anchor of the Massachusetts technology economy for decades, and the administration is optimistic that the newly combined Dell-EMC enterprise systems unit will have a robust presence locally for years to come," said Elizabeth Guyton, a spokeswoman for Baker.
State Representative Carolyn Dykema, a Holliston Democrat whose district includes Hopkinton, said EMC has been part of the region's fabric for decades and she hoped that will continue.
"EMC has been a good neighbor and strong community partner for many years," Dykema said. "I'm hopeful this relationship will continue for many years to come, regardless of the name that's over the front door."
EMC's local operations are primarily concentrated in three Massachusetts suburbs. The company has nearly 1.7 million square feet of office space at its Hopkinton headquarters; 1.2 million square feet in Franklin (where it has manufacturing operations); and more than 300,000 square feet in Bedford, the home of its RSA Information Security unit, according to its securities filings.
The chairman of the Hopkinton Board of Selectmen, Ben Palleiko, said he doubted that the combined company would completely shutter its Massachusetts operations. And he said any changes would likely only happen gradually, making it easier for the communities to deal with the effects.
"What happens will probably take years to play out," said Palleiko, who has dealt with many corporate mergers in his two decades as an investment banker.
Moreover, Palleiko noted that even if the company closes some local offices, it will still be responsible for paying taxes on the property.
"The major revenue sources aren't going to dry up overnight," he said, adding that most of the town's revenue comes from taxes on residential properties. "I don't want to trivialize this — EMC has been a great community partner,'' he said.
Still, EMC and Dell have so far provided only scant details of how the sale might affect local communities, making it hard for officials to know how they will need to adjust.
Bob Vallee, chairman of the Franklin Town Council, said the town had not been contacted by the company about the sale. "We have heard nothing from EMC," Vallee said. "Not a word."
EMC is also a major property owner in Westborough, dating back to its 1999 acquisition of Data General, which was one of the last of the old minicomputer companies that once ringed Route 128. Today, Westborough assessment records show EMC still owns nearly $18 million in property in the town.
EMC said in its securities filings that it owned land in Massachusetts for "possible future expansion."
Now, it could be up to the company's new owner to decide what to do with that property.