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Quantum lays off fifty – prepping for a sale?

'Excited about increased market opportunities'

Internet Security Threat Report 2014

Fifty people have been let go by Quantum with some insiders thinking the company is being groomed for a sale, either in whole or in parts.

Affected company staff were given the news on Thursday, April 11th.

Christine Bachmayer, Quantum's senior manager for marketing in EMEA, said:

As we begin our new fiscal year (started April 1), we are excited about increased market opportunities in areas such as big data, cloud, virtualisation and deduplication. We plan to grow overall revenue this year, and as our business changes, we are shifting investments and resources to take advantage of these opportunities more quickly and effectively. This includes eliminating approximately 50 positions worldwide (primarily in General and Administrative roles, Operations, Sales and Service) as we look to hire new team members with different experience and skill sets to meet our evolving needs during the year.

There is a feeling among some Quantum staff that the company is being made ready for a sale. Although our contacts said there is no obvious buyer for the company as a whole, there are potential buyers for parts of the business.

EMC, for example, might buy the DXi deduplicating backup appliance business, and that could enable it to get out of a 2007 cross-licensing agreement with Quantum. It was suggested that StorNext might go to NetApp, with Sunnyvale possibly even buying Quantum's Scalar tape business. That seems a stretch, leaving us reeling.

Quantum's CEO Jon Gacek was at the CFO helm of tape vendor ADIC when it was sold to Quantum. The insider suggestion is that history could repeat itself.

Bachmeyer told us, "Regarding your question about the business being prepared for sale; we don't comment on rumours or speculation."

The company's tape product–based revenues are falling, and have been for some years. Intended growth strategies such as building up the DXI product line – battered by EMC Data Domain competition – and the niche StorNext media tape-disk file management suite have not delivered the revenue goods, and consume research and development money.

Quantum's annual revenues have trended quite sharply down since a 2007 high point of $1.02bn, with the 2012 fiscal year showing $652.4m revenue. The 2007, 2008, 2009, and 2012 years all recorded losses rather than annual profits. The three fiscal 2013 quarters have each recorded losses. The 2013 annual result could show revenues dipping below $600m and a loss greater than $40m based on the 9-month numbers. ®

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