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Rackable lays off 15%

Joe Landman alerted us to the weight reduction plan at Rackable following a Q4 sales downturn. From the story at El Reg

Rackable logoGoing public has not been as much fun for boutique server maker Rackable Systems as the idea must have sounded like a few years back. Today, the company announced that it had slashed 15 per cent of its 350-strong workforce to get costs back in line with falling sales. Those Sales that are falling thanks in large part to the Meltdown, natch.

Rackable has lowered expectations for the second quarter in a row, following first a 25% downturn in sales in Q3. Rackable is having to cut into muscle here, starting by sacrificing the future last quarter

The first time, back in November, was when the company reported its third quarter financial results, which saw sales plummet by 25.2 per cent to $65.3m and a loss of $6m. That loss was greatly reduced because Rackable cut research and development expenses by 23.4 per cent, sales and marketing by 65.1 per cent, and general and administrative costs by 47.9 per cent.

And now cutting into today

“Rackable Systems was adversely impacted by the economic turmoil during the fourth quarter,” explained Mark Barrenechea, the company’s president and chief executive officer. “However, we are acting quickly and decisively to match expenses to revenues, including having reduced our work force by 15 per cent this month. We have also re-purposed investment dollars to increase our commitment to engineering and new products.

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