Isilon cuts 10 percent of staff, shares plunge on sales shortfall |
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Isilon cuts 10 percent of staff, shares plunge on sales shortfall
Citing economic weakness and uncertainty, Seattle-based Isilon Systems today announced that it is cutting 10 percent of its workforce. The Seattle digital storage company also said that revenue for the first quarter would be down about 15 percent to 17 percent over the fourth quarter. The shares plunged nearly 10 percent on the news in trading this morning.
"It's clear that persistent global economic weakness and uncertainty has led to contraction in many of our customers' IT budgets", said Isilon CEO and founder Sujal Patel. As part of the revenue shortfall, the company plans to take a $3.8 million write down on excess inventory.
It now expects first quarter revenue of $26.5 million to $27 million and a net loss of 16 cents to 17 cents per share. At the end of March, Isilon had $76.3 million in cash and cash equivalents.
Isilon, which helps media, entertainment, health care and other corporations store digital files, said that it has appointed George Bennett to the position of Senior Vice President of Worldwide Field Operations. Bennett -- who replaces Steve Fitz -- previously served as Senior Vice President of Sales at NetApp and Quantum.
Isilon didn't say how many people will lose their jobs in the layoff, but the company employed 394 workers at the end of last year. That means about 40 workers will lose their jobs.
One of the last venture-backed companies to complete an IPO in the state, Isilon was founded by former RealNetworks manager Patel and bankrolled by Madrona Venture Group, Atlas Venture and others.
The company plans to host a conference call today at 2 p.m. to discuss the layoffs and the preliminary first quarter results.
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