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Iomega to Cut 120 Jobs, Including 13 in San Diego

Posted on: Wednesday, 27 July 2005, 09:00 CDT

Jul. 27--San Diego's Iomega Corp. said yesterday that it will cut 120 jobs, or about 30 percent of its worldwide work force, as part of a restructuring plan to cut expenses amid falling sales.

The maker of once-popular Zip drives and other storage products for computers said the job cuts will occur throughout the company's facilities, which are located in San Diego, Utah, Singapore and Switzerland.

Locally, 13 workers at the company's roughly 60-employee headquarters are expected to lose their jobs, Iomega spokesman Chris Romoser said.

The job cuts and "realignment" of some product lines will save Iomega as much as $42 million a year, the company said.

Iomega has been unprofitable for a number of quarters as sales of its Zip drives plunged faster than it anticipated. The company has introduced new products aimed at consumer and small business markets, but they've haven't caught on fast enough to make up for falling Zip drive revenue.

The company expects restructuring costs of as much as $10 million and other expenses of about $3 million, which will be recorded in the second half of 2005. The company announced in September that it was cutting 145 jobs, or a quarter of its work force at the time.

"Iomega has been undergoing an evaluation of its business model," said chief executive Werner Heid. "The restructuring actions announced today are expected to result in a crisper market and product focus."

Heid added that the streamlined cost structure should allow the company to achieve operating profitability in the fourth quarter.

Iomega's shares closed up 2 cents yesterday at $2.67.

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IOM,

Source: The San Diego Union-Tribune

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