In the current environment, it's pretty tough selling multimillion-dollar software systems. So, this week EMC (NYSE: EMC), a global software company, announced it is paring back its operations by laying off 2,400 employees (the current workforce stands at 33,000).
However, EMC had some good news. Quarterly revenues are expected to come in at $4 billion, up 4% over the past year. Earnings are projected at $0.13 to $0.14 per share.
If anything, the recession is giving EMC an excuse to restructure itself. Over the past few years, the company has bulked up with major acquisitions and now has an extensive portfolio of software solutions.
So, by reducing operating costs, profits are likely to be robust. After all, EMC provides software that is critical for many organizations and is difficult to unwind.
All in all, Wall Street likes the news. In today's trading, EMC's shares are up 3.5% to $11.57.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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