nStor cuts 13% of staff

It seems the storage sector is not immune from the impact of the current economic slowdown. The latest company to feel the effects is nStor Technologies, Inc. After projecting a drop in revenue for the fourth quarter of 2000, the San Diego, Calif.-based maker of storage area networks (SANs) announced a change in strategy toward long-term revenue growth and a 13% reduction in its overall workforce.

"We released 13% of our team. The vast majority of those were in roles that supported the general direct sales effort," said James Campbell, director of marketing communications for nStor.

The company sees the cuts as streamlining its operations and reducing operating costs.

"We have refocused our attention on OEM opportunities, the channel and proven direct sales areas such as oil and gas, Federal government and large accounts that do business with us directly," Campbell said. NStor's unaudited revenues for the fourth quarter and year-end 2000 were $7.3 million and $40.2 million, compared to $12.7 million and $41.1 million for the fourth quarter and year-end 1999. The company said it has completed the transition to its new 2U-based product family and it will aggressively expand its reseller base and OEM relationships.

Campbell said nStor's core focus product set is built around [the 2U] enclosure, giving nStor about 60-70% part overlap across the product line. "This will assist us in inventory management and responsiveness to changes in market demand. Obviously, that will also have an effect on profitability, as will the 13% reduction."

Jim Habuda, nStor Vice President responsible for Indirect and OEM Sales, added, "We are aggressively expanding our international and domestic reseller base, in addition to our OEM relationships. We expect to make several more announcements in the coming months that detail the agreements that are being put in place now and that should substantially increase our revenues from this part of our business."

nStor Technologies is a provider of enterprise-class Storage Area Network (SAN) solutions for Windows NT, Unix and Linux platforms. nStor's full range of products include the NexStor 802F and the NexStor 18F, as well as a set of SCSI, Tape and storage management solutions.

Let us know what you think about the story, e-mail Kevin Komiega, assistant news editor

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