Partners: EMC Job Cuts May Add To 'Massive Confusion' Around Dell Acquisition

The lion's share of the job cuts EMC announced last summer will come this quarter, and they'll result in a charge of $250 million as the company prepares to be acquired by Dell in a $67 billion deal.

In a U.S. Securities and Exchange Commission filing, EMC says the job cuts will be "substantially completed" by the end of the first quarter, and "fully completed" by the end of the year.

Round Rock, Texas-based Dell expects to close its acquisition of EMC between May and October.

[Related: The 10 Biggest EMC Stories Of 2015]

Hopkinton, Mass.-based EMC didn't disclose the number of jobs being cut, but said the company would take a $250 million charge as a result.

Kent Christensen, practice director for virtual data center and cloud at Eden Prairie, Minn.-based EMC partner Datalink, said partners aren't likely to feel the effects of the layoffs directly, but the cuts do add to "massive confusion" surrounding the Dell deal.

"There's massive confusion about what's going to happen with Dell," Christensen said. "EMC is not our largest partner, and they're more difficult to deal with than others. We'll see if this changes that. There are those that are really loyal to EMC, and for those that are loyal, those questions are more difficult for them."

Dan Serpico, president of FusionStorm, a large, San Francisco-based EMC and Dell partner, also said the cuts themselves are unlikely to affect channel partners directly.

"Lots of big companies go through the cycle of adjusting their workforce all the time, adding and subtracting," Serpico said. "Cisco's had cuts, HP split the company and had 25,000 or 30,000 cuts. The fact that they're reducing head count arguably says they're more dependent on the channel -- hopefully, that's true."

The EMC job cuts are part of a broader restructuring plan revealed amid continuing flat revenue last July. The plan reduces costs by $850 million annually beginning next year.

At the time the restructuring was unveiled, EMC Chairman and CEO Joe Tucci said the program's aim was to better align EMC's federation of companies with the industry's transformation away from traditional data storage hardware and toward the digital solutions enterprise customers are demanding.

The restructuring program is expected to have the greatest impact on the EMC Information Infrastructure unit, executives said at the time.

Tucci also said at the time that EMC could get rid of products and existing businesses that aren't showing growth, saying EMC would invest more in customers' digital transformations, security analytics and hybrid cloud.

"Things that are not strategic and helping with that, we'll look at how we can monetize," Tucci told investors during a conference call in July.

PUBLISHED JAN. 4, 2016