Brocade narrows loss, whacks workers

Valued employees affected

By Ashlee Vance in Chicago • Get more from this author

Posted in Storage, 19th May 2004 21:27 GMT

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Brocade staffers helped the company narrow its second quarter loss and were rewarded for their efforts with a round of layoffs.

Brocade today announced it would trim close to 10 percent of its workforce or 110 employees. This news came as the storage switch maker reported second quarter revenue of $146m - an 11 per cent rise over the $131m reported in last year's Q2. The revenue gain, however, was not enough to pull Brocade into the black, as it posted a net loss of $2m, which compares to a massive loss of $146m last year.

"Today Brocade announced its fifth consecutive quarter of improved financial performance, confirming our belief that growth in the network storage market is sustainable for companies that offer compelling and competitive products to their trusted OEM partners and value to the end customer," said Greg Reyes, CEO at Brocade.

Um, what about the layoffs?

"The majority of the measures we are taking are structural but, unfortunately there are some valued employees that will be affected," continued Reyes. "I feel confident that all of these actions combined, place Brocade in its best competitive position in over two years -- strategically and operationally -- and will result in a healthier and more leveraged business model with room to invest for future growth."

During the second quarter, Brocade rolled out a new line of lower-end SAN (storage area network) switches. The company also completed a deal with IBM to bundle its switch products in Big Blue's blade server chassis. ®