These are tough times for OCZ. In September, the company's founder and CEO stepped down, allegedly over accusations of mismanagement. Less than one month later, OCZ warned of a "significant" quarterly loss, which it attributed to "customer incentive programs"—i.e. overly aggressive solid-state drive pricing.
Now, the company has issued a statement that outlines a reorganization plan. That plan involves deep cuts to both OCZ's workforce and its product line, which is notorious for crowding similar products around the same price points. Here's what the company says it's doing:
As part of the Company's transformation, it has taken initial steps to make its business more efficient and profitable by initiating the EOL procedures to discontinue approximately 150 product variations, including reducing the value category by approximately 80 percent. This streamlines OCZ's product offerings to address the mainstream and higher-end consumer products, as well as enterprise and OEM solutions. The Company has also evaluated its inventory and is in the process of making the necessary adjustments, including monetizing some inventory to better align its product offerings and to free-up cash for the business. Excluding production personnel, the Company has reduced its global workforce by approximately 28 percent. Total personnel at the Taiwan production facility, including outside contractors, has been reduced by approximately 32 percent. This facility continues to increase overall efficiency and production levels. The Company will continue to take further actions aimed at reducing overall costs and improving operating results.
In short, we're going to see a leaner OCZ with a more streamlined product lineup and fewer bargain-bin offerings. The company says it's still "significantly" investing in research and development, though. Hopefully, that means the products remaining in OCZ's lineup won't suffer as a result of these changes.
Ralph Schmitt, OCZ's new CEO, says the reorganization will benefit both stockholders and OCZ itself. Streamlining the company in this fashion will also "help ensure that OCZ will be in the best position moving forward to address the fast growing consumer and enterprise SSD markets," Schmitt claims.