Overland cuts salaries as sales and profits dive


Overland cuts salaries as sales and profits dive

Microscope contributor

Overland has highlighted slowing sales in the data storage sector, in particular to its larger OEM customers, as it sunk to a net loss of $5.2m (£3.5m) for its second quarter to the end of December.

Sales at Overland declined 15.2% year-on-year over the last three months of calendar 2008, hitting $28.9m, while sales to OEMs plunged 37% over the same period.

In an indication that things are getting worse, Overland quietly announced a significant 10% pay cut to all employees and a 17% reduction in headcount as it targets around $14m of annual savings.

“The challenges we faced in the December quarter were significant,” said Vern LoForti, Overland president. “We were impacted by a combination of the difficult worldwide economic conditions and concerns in the first two months of the quarter about our ability to obtain financing.”

Amidst declining sales across the business, the one bright spot was services and spares revenues, which grew by over 24% as customers grew increasingly keen to milk their investments for longer.

Meanwhile, the vendor has also unveiled an ‘aggressive’ end user and channel sales campaign for its SMB SNAP Server portfolio after rival NetApp discontinued support on its competing S family/S550 gear earlier in the week.

“It is frankly stunning that NetApp would want to effectively disenfranchise its customer base by discontinuing this range,” said Overland northern EMEA sales director David Spate. “We are urging any channel partners who resell the range to contact us as we have in SNAP Server a highly cost-effective, scalable and future proofed product.”

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