Iomega Increases Job Cuts to 1,250; Will Take Charges (Update2)
By Peter J. Brennan
Roy, Utah, Aug. 9 (Bloomberg) -- Iomega Corp., the maker of Zip and Jaz data-storage devices for computers, increased its planned job cuts to 1,250, or 38 percent of its workforce, as the company seeks to lower costs.
Today's reduction boosts the number of jobs that will be eliminated from the 800 to 1,100 announced July 19, spokesman Chris Romoser said. Iomega will take third-quarter charges of $55 million to $65 million for the cuts, which will leave the company with 2,050 workers.
Iomega's sales have slumped as demand has fallen for personal computers and as removable data-storage devices, such as rewritable compact discs and memory-chip cards, competed for consumer dollars. Sales at the Roy, Utah-based company have fallen every year since 1997.
``The market is very, very depressed,'' President and Chief Executive Werner Heid said on a conference call.
Iomega reported a loss for the second quarter ended June 30 of $35.9 million, or 13 cents a share, compared with a profit of $40.4 million, or 15 cents, a year earlier. Sales declined 39 percent to $184 million. Iomega said when it reported the results that business was being hurt by lower revenue from the Zip and Jaz products.
Former President and Chief Executive Bruce Albertson resigned on May 21. At the time, the company blamed his departure on disagreements with the board. Heid, a former executive vice president at InFocus Corp., was named as his replacement on June 18.
Iomega's products save Internet downloads, audio files and personal photographs while protecting content from viruses and hackers.
Shares of the Roy, Utah-based company rose 7 cents, or 4.4 percent, to $1.65 in regular trading before the report. The shares have fallen 51 percent this year.
