Rackable Cuts Staff, Lowers Guidance

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Server vendor Rackable Systems, Inc. (RACK) has laid off 15 percent of its workforce and sharply lowered financial projections for fiscal year 2009, citing the impact of the weaker economy. Rackable now projects full year revenue of $245 million to $250 million, a sharp reduction from its previous forecast of $275 million to $300 million,

“Rackable Systems was adversely impacted by the economic turmoil during the fourth quarter,” said Mark Barrenechea, president and CEO of Rackable Systems, in a statement Tuesday. “However, we are acting quickly and decisively to match expenses to revenues, including having reduced our work force by 15 percent this month. We have also repurposed investment dollars to increase our commitment to engineering and new products. Our cost control and working capital actions resulted in strong inventory controls and cash management, despite a challenging quarter.

“We continue to protect our strong balance sheet, manage our working capital, and be debt-free,” he added.. “For the long-term, we are innovating to win and our new products are being well received.”

About the Author

Rich Miller is the founder and editor-in-chief of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.

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