EMC Corp. (NYSE: EMC) shares hit a 12-month low Wednesday, dropping 4% to $16.30 by 12:30 PM Eastern. The stock slide coincides with a research note by Merrill Lynch & Co. Inc., published today, which details conflict in EMCs salesforce.
As reported on Byte and Switch yesterday, EMC has just lost Michael Ruffolo, head of global sales, and is rumoured to be bleeding sales staff to competitor Hitachi Data Systems (HDS) (see EMC Global Sales Chief Quits).
According to Merrill Lynch, these problems go yet deeper. In his research note, principal analyst Thomas Kraemer writes that EMC has recently fired a sales team in Germany, a manager in France, and 15 sales staff in the Netherlands. Europe has always been a difficult region and continued turmoil would not surprise us, he says.
EMC is said to be in the process of reorganizing its sales force, and Merrill expects a significant round of layoffs as part of this restructuring.
On top of this, Merrill says veteran hardware engineers are unhappy over the direction of the next-generation Symmetrix product, code-named "Spyder." Its EMCs "switch-in-a-box" and faces stiff competition from several startups, including Cereva Networks Inc., 3PARdata Inc., and Yotta Yotta. There could be some senior-level defections, over this, says Kraemer.