Layoffs and other restructuring efforts will cost Zip disk maker Iomega Corp US$55 million to US$65 million in the third quarter, the company announced Thursday.
Iomega is cutting about 1,250 of its 3,300 employees, shutting facilities and redesigning its sales force in an attempt to control costs and boost flagging revenues.
Severance packages and the termination of contracts and leases will cost the company about US$43 million in cash, chief executive Werner Heid said in a conference call Thursday. The restructuring is expected to save about US$65 million a year, starting in fiscal year 2002.
``We understand that to deliver profitable growth, [Iomega needs] ... a lean operation,'' Heid said.
If the company can do that, it can be profitable through fiscal year 2002, Heid said. That's despite the likelihood that the tech market will remain stagnant.
``We cannot use this economic decline as an excuse,'' he said.
Iomega's future also depends on boosting sales of its mainstay Zip products, which made up 79 percent of revenues in the second quarter, and its new Peerless line, which stores up to 20 gigabytes of data on each cartridge.
That may mean slashing prices on the Zip drive to as low as US$50 (a basic Zip now sells for US$85 on the company Web site), Heid said.
Meanwhile, the Utah-based company is at least temporarily turning away from some of its flashier products, such as HipZip, PocketZip and PhotoShow.
But Heid assured analysts the company will continue to put 5 percent of its revenue toward research and development, even as the company pares down.
Iomega had announced in July that it would cut 1,100 jobs worldwide. It also plans to close a North Carolina distribution center.
The cuts are expected to bring charges of US$16 million in the third quarter, Heid said. About US$10 million will go toward ending leases around the world, and US$14 million will go to terminating vendors.
The company is also spending as much as US$3 million to move its headquarters from Utah to the West Coast.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique