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.
Taiwanese Olympic badminton men’s doubles gold medalist Wang Chi-lin (王齊麟) and his new partner, Chiu Hsiang-chieh (邱相榤), clinched the men’s doubles title at the Yonex Taipei Open yesterday, becoming the second Taiwanese team to win a title in the tournament. Ranked 19th in the world, the Taiwanese duo defeated Kang Min-hyuk and Ki Dong-ju of South Korea 21-18, 21-15 in a pulsating 43-minute final to clinch their first doubles title after teaming up last year. Wang, the men’s doubles gold medalist at the 2020 and 2024 Olympics, partnered with Chiu in August last year after the retirement of his teammate Lee Yang
FALSE DOCUMENTS? Actor William Liao said he was ‘voluntarily cooperating’ with police after a suspect was accused of helping to produce false medical certificates Police yesterday questioned at least six entertainers amid allegations of evasion of compulsory military service, with Lee Chuan (李銓), a member of boy band Choc7 (超克7), and actor Daniel Chen (陳大天) among those summoned. The New Taipei City District Prosecutors’ Office in January launched an investigation into a group that was allegedly helping men dodge compulsory military service using falsified medical documents. Actor Darren Wang (王大陸) has been accused of being one of the group’s clients. As the investigation expanded, investigators at New Taipei City’s Yonghe Precinct said that other entertainers commissioned the group to obtain false documents. The main suspect, a man surnamed
The government is considering polices to increase rental subsidies for people living in social housing who get married and have children, Premier Cho Jung-tai (卓榮泰) said yesterday. During an interview with the Plain Law Movement (法律白話文) podcast, Cho said that housing prices cannot be brought down overnight without affecting banks and mortgages. Therefore, the government is focusing on providing more aid for young people by taking 3 to 5 percent of urban renewal projects and zone expropriations and using that land for social housing, he said. Single people living in social housing who get married and become parents could obtain 50 percent more
DEMOGRAPHICS: Robotics is the most promising answer to looming labor woes, the long-term care system and national contingency response, an official said Taiwan is to launch a five-year plan to boost the robotics industry in a bid to address labor shortages stemming from a declining and aging population, the Executive Yuan said yesterday. The government approved the initiative, dubbed the Smart Robotics Industry Promotion Plan, via executive order, senior officials told a post-Cabinet meeting news conference in Taipei. Taiwan’s population decline would strain the economy and the nation’s ability to care for vulnerable and elderly people, said Peter Hong (洪樂文), who heads the National Science and Technology Council’s (NSTC) Department of Engineering and Technologies. Projections show that the proportion of Taiwanese 65 or older would
RSS