Storage vendor Iomega Corp is axing another 145 personnel, or 25% of its total workforce, in its latest attempt to return the company to profitability.
Over the last four quarters, the San Diego, California-based company has lost more than $50m, and sales have declined for six straight quarters.
Iomega will record expenses of $5m to $7m related to the restructuring in the fiscal third and fourth quarters. It believes the steps should help save it approximately $30m to $35m per year when the implementation is complete by the end of the first quarter.
Many of the employees being axed work on Iomega’s DCT portable disk technology, which the company had previously said it would stop developing. The cuts are expected to affect all geographic regions within the company.
We have taken some very difficult but necessary actions to adjust the company’s operating and cost structure to our expected revenue levels, chief executive Werner Heid said in a statement.
It was back in 1995 that Iomega introduced the first external computer disk drive, and since then it has sold more than 46 million Zip drives and more than 280 million storage disks.
Yet in recent years it has struggled as the PC industry installed larger hard disc drives in personal computers, and as the trend moved towards network storage. Indeed, Zip disks have been largely supplanted by rewritable compact discs, memory sticks, and MP3 players, which are the medium of choice for downloading digital music.
In 2001 the company cut 39% of its global workforce, consolidated operations, and relocated its headquarters to San Diego. Then in July last year, it announced plans to lay off 200 staff, or 23.5% of its workforce.