Iomega tears and blood
Operations to try to save the salvable at Iomega continue. After posting results well below expectations last quarter, losses of approximately $ 36 million and 40% lower turnover than in the same period last year, the Salt Lake City company announced drastic decisions yesterday. The most dramatic 38% staff reduction; employees will go from 3300 to 2050, a higher number than expected at the beginning of July when the company thought to lay off 800 to 1100 employees. There are also other actions on the calendar aimed at reducing costs, including moving the headquarters from decentralized Utah to the West Coast where most of the IT industries are located. Iomega also plans to implement a "de splitting" operation of the shares by delivering one in exchange for five. This will not entail any economic repercussions for the shareholders, who will have to approve the operation, but very significant of the economic conditions in which Iomega is facing. Normally a splitting operation is carried out when the actions have too high a value, de-splitting instead is a very rare operation and is put into action when the value of the actions is too low. Iomega's goal following this series of interventions to cut operating expenses by $ 65 million while lowering the break-even point. According to the management of the Iomega company, it will return to producing profits from 2002. The crisis of the company known for its ZIP has roots back in time, to be precise when, after having dominated the universe of removables, it did not understand the revolution in time of the CD-RWs that have supplanted the ZIPs at infinitely lower costs, per mega archived. Subsequently Iomega tried to beat numerous other roads but without enormous success. Now the challenge will be to enter a context where there are already numerous and aggressive competitors or to invent something new, as it did at the time of the ZIP launch.