Iomega outlines job cuts, restructuring

ROY: Iomega Corp., faced with declining sales of its core Jaz and Zip data
storage devices, on Thursday said it would cut some 38 per cent of its staff and
take a third-quarter charge under a restructuring of the troubled computer
storage company.

Roy, Utah-based Iomega said it expects to record restructuring and other
charges in the range of $55 million to $65 million in the third quarter, in an
effort to align its cost structure with its expected revenue levels. The
third-quarter charges will reflect expenses associated with the reduction in the
company's worldwide work force, a plan which will trim staff in the second half
of this year to 2,050 from 3,300. The charges also cover other issues such as
termination of contractual obligations.

"Our goal in the short term is to significantly lower the break-even
point of this business, stop the revenue decline and improve operational
efficiencies," said Werner Heid, president and chief executive of Iomega.
The company, which first announced on July 19 its plans to launch a
restructuring, anticipates the actions will result in an annual cost reduction
of about $65 million, beginning in fiscal year 2002.

As a result, Heid told analysts Thursday the company expects to be profitable
throughout 2002.

On July 19, Iomega, which in June named Werner Heid as its third chief
executive in two years, posted a second quarter loss of $35.9 quarter and 35 per
cent revenue drop amid slumping sales of its marquee Zip and Jaz drives,
portable products which allow users to store and transport huge amounts of data
on pocket-sized disks.

At that time, the company also said it would move its headquarters to the
West Coast from Roy, Utah, and pursue a one-for-five reverse stock split of the
company's common stock, a proposal that must be approved by shareholders. The
fate of Iomega's Zip drives and related disks are closely tied to the personal
computers industry, where demand has been flagging.

Iomega shares closed Thursday at $1.65, off 7 cents, or 4 per cent. Since
June 18, when the company announced it hired Heid to replace previous CEO Bruce
Albertson, the stock has declined 20 per cent and underperformed the Standard
& Poor's 500 index by 19 per cent.

(C) Reuters Limited 2001.