OCZ trims product lines, workforce

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.

Comments closed
    • Derfer
    • 7 years ago

    Called it a few times over. Their lets do a zillion drives while Crucial and Samsung take over with performance oriented monolithic product lines never made sense. Having one high volume product allows lower cost making drives like the Vertex uncompetitive.

    • Bensam123
    • 7 years ago

    Oh my… so they announce one quarter of losses and all of a sudden they start throwing things overboard? I can see removing ‘crowding’ as OCZ definitely has a lot of that. They have a pretty big plastering of drives all over the place and still produce old outdated models like the Vertex 2. Although there is also a upside to having half the purchasable market showing your brand name.

    But cutting their workforce? All they really had to do is to cut back on their incentive program so their drives are priced similarly to other manufacturers, perhaps a little cheaper.

      • indeego
      • 7 years ago

      Yes, cutting workforce, because demand isn’t there, and they likely have overhead expecting demand to be there.

        • Bensam123
        • 7 years ago

        I’m pretty sure SSDs are still in demand… The workforce cut seems more like a knee-jerk reaction then anything.

          • Farting Bob
          • 7 years ago

          OCZ make a lot more than SSD’s, people here seem to forget they have their name on most things that go in or connect to a PC. Many of these are clearly not doing great business or competing with their stablemates. Cutting out unprofitable or low margin products across the board, and cutting those staff who work on them is going to save OCZ money and bring more focus to a company that recently has just been throwing everything at the wall to see what sticks.

      • absurdity
      • 7 years ago

      You’re making a pretty big assumption that “all” they have to do is cut back on their incentive program, aren’t you?

        • Bensam123
        • 7 years ago

        If they’re another SSD manufacturer and just like all the other manufacturers in that sense, then yes. You seperate out what sets them apart from all the other competition and information they’ve already dropped.

        You are right though, they could’ve had staff ‘bloat’ and people they’re firing weren’t actually beneficial to the company, but I sorta doubt that.

    • Jasked1
    • 7 years ago

    Ryan was not the company’s founder.

      • Meadows
      • 7 years ago

      Who was, then? Wikipedia repeats the above, while OCZ’s own website makes no mention of who founded what (except for mentioning the year 2002).

        • Jasked1
        • 7 years ago

        The person who posted that on Wikipedia used the following as a reference that contradicts his or her statement:
        [url<]http://ir.stockpr.com/ocztechnology/recent-news/detail/2143/ocz-board-appoints-alex-mei-as-interim-ceo-accepts-ryan-petersens-resignation[/url<] Note the quote "I am very pleased to have transitioned the Company from a niche developer, manufacturer, and seller of high-performance DRAM memory modules to a global leader in solid-state storage solutions." If he "transitioned" the company then he was not the founder. Here's another reference: [url<]http://www.anandtech.com/show/5147/the-ocz-octane-review-512gb[/url<] "Having just taken over the company, Ryan was eager to know what he had to change to fix OCZ's reputation." Edit: I fixed the Wikipedia page.

          • Meadows
          • 7 years ago

          But that still means we don’t even know who founded the poor company.

    • Kougar
    • 7 years ago

    OCZ is selling the Vertex 4, Agility 4, Solid 4, Octane, Petrol, Vertex Plus, Synapse Cache, Revo & RevoHybrid, and was doing so while sell producing Vertex 3’s and Agility 3’s. I think the Onyx & Colossus series already ended, but who knows.

    Can’t wait to see a far more sensible, if not sane SSD product family from OCZ especially with their next Indilinx chip due out at some point.

      • brute
      • 7 years ago

      are you saying that all ocz ssds look the same?

      racist

        • BIF
        • 7 years ago

        What a brute!

    • Vasilyfav
    • 7 years ago

    There are several things that need to happen in OCZ as well as the general SSD market to promote adoption and help development of SSD tech.

    #1 – SSD capacities below 128GB need to disappear. It makes no sense to put so few NAND chips with an expensive controller, considering that memory density continues to increase as die processes shrink and manufacturers find more ways to pack more data into the same space (MLC, e-MLC, toggle MLC? I’m not an expert on these). Anything below 128GB can and should go onto a hybrid drive.

    #2 – More clear branding. Right now, many SSD vendors are suffering from NVIDIAtis, there are dozens if not hundreds of serial numbers that don’t mean anything to the regular user, names like Agility, Vertex, Colossus. Intel’s 335, 520, 320. Multiple other vendors have catchy sounding names that don’t mean anything or indicate performance in a meaningful way.

    Something like WD’s scheme would work pretty well: Green – budget consumer/OEM. Blue – performance consumer/OEM. Black – enthusiast consumer. Red – Server and Enterprise.

    #3 Software that helps improve reliability – measuring SSD health, reducing write cycles by caching more things into RAM instead of onto SSD.

      • ludi
      • 7 years ago

      [quote<]SSD capacities below 128GB need to disappear. It makes no sense to put so few NAND chips with an expensive controller[/quote<] You might just as well argue that McDonalds shouldn't sell a cheeseburger when they already offer a doublecheeseburger, when in fact, their market supports both products. If it didn't make sense to offer SSDs at various capacities, they wouldn't be doing it. There isn't a finite supply of SSD capacity, where every 64GB or 80GB drive somehow takes a 128GB or 240GB drive out of the market. As long as they can sell the lower-capacity drive at a cheaper price point, they will do so. Once the smaller capacities are no longer valuable to customers or become uneconomical to produce, they will disappear, although ironically the advent of cloud computing and storage may mean that high-capacity local storage becomes the province of enthusiasts only, while the majority of customers would be perfectly fine with cheap, low-capacity devices.

        • Vasilyfav
        • 7 years ago

        [quote<]Once the smaller capacities are no longer valuable to customers or become uneconomical to produce, they will disappear[/quote<] That's what I meant. It's not going to happen because manufacturers just actively stop making 64gb, but with the ever cheaper nand, the cost of the controller will become proportionally greater on 64gb and the margins will diminish. It will happen by itself, since there's always demand for higher capacity at a lower price. Making 128gb with cheap NAND and selling them is incentive compatible for both consumer and producer.

          • MadManOriginal
          • 7 years ago

          You’re right, it will happen the same way it happened with HDDs, where increased platter denstities put a floor under the lowest capacities for single platter drives. You can already see the price compression at the lower capacities for SSDs (0-64GB) and as flash density increases this lowest capacity will go up because unlike HDD platters where there’s no problem just using part of a platter, no one is going to want to do that with flash.

          • DPete27
          • 7 years ago

          [quote<]with the ever cheaper nand, the cost of the controller will become proportionally greater on 64gb and the margins will diminish[/quote<] This is already in effect as you can see by the price/GB of lower capacity SSDs are often higher than 120-240GB SSDs. Yet, for some reason, consumers decide that it's not worth the extra $20 or less to double the capacity of their SSD?

            • BIF
            • 7 years ago

            [quote<]...for some reason, consumers decide that it's not worth the extra $20 or less to double the capacity of their SSD? [/quote<] Consumers are funny animals. They apply logic. Sometimes faulty, sometimes not. But it usually reflects their reality at any point in time. Some random thoughts: 1. Maybe users think that their SSDs will wear out someday. Where ever did they get that idea? Oh yeah, only in ALL reviews and articles about SSDs and their limited number of writes. Possible logic point: If the SSD is going to fail, why spend a penny more for capacity that I either don't need or don't want to have to worry about? 2. Most people not in the music making business use SSDs for their system drive. Some OSs will be perfectly happy running on a 32 GB drive. A possible exception to this rule: People who make music often have HUGE and static (not often changed) sample libraries, and prefer to use SSDs (sometimes in multiples or just plain big ones) for those libraries. 3. SSD issues and/or controller bugs in the past may have damaged the market psyche. Rebuilding trust is a long road. Maybe people don't want to put too much of their valuable data on SSDs, and they're just happy to put only their system on it?

            • travbrad
            • 7 years ago

            [quote<]1. Maybe users think that their SSDs will wear out someday. Where ever did they get that idea? Oh yeah, only in ALL reviews and articles about SSDs and their limited number of writes.[/quote<] Those same reviews also usually mention that under and normal circumstances it would take many years to reach that write limit though, in fact longer than most HDDs will last. The average person doesn't really write enough data for that to be a justified concern. [quote<]Possible logic point: If the SSD is going to fail, why spend a penny more for capacity that I either don't need or don't want to have to worry about?[/quote<] That's some of the faulty logic you mentioned. A smaller SSD has less flash to write to so it will wear out faster if you do the same amount of writing to it. So if they were really worried about a drive "wearing out" then they should be getting the biggest drive they can, not the smallest.

            • ludi
            • 7 years ago

            You really think that the bottom-dollar SKUs are being sold to people who are ambivalent to cost?

      • Deanjo
      • 7 years ago

      [quote<]#1 - SSD capacities below 128GB need to disappear.[/quote<] I just ordered a 32 Gig drive for use of SRT so they still do have a use.

        • Chrispy_
        • 7 years ago

        But was it almost the same price as a 64GB drive that you could have partitioned with loads of spare area?

        Don’t know about where you are, but the cheapest drive here in the UK is probably the Crucial V4

        £35 gets you a 32GB, 60MB/s seq. write, 1.2K IOPS@4K Crucial V4
        £40 gets you a 64GB, 100MB/s seq. write, 2.4K IOPS@4K Crucial V4

        It really, really is a no-brainer when the pricing is like that, and it’s not just Crucial. Similar pricing parttern for OCZ, Samsung, Kingston, Sandisk…..

      • absurdity
      • 7 years ago

      I can figure out the Intel branding, at least – 3xy is lower end, 5xy is higher end. The numbers at least mean something. The OCZ names in particular make absolutely no sense to me; I haven’t memorized the difference between a Vertex and an Agility.

    • MadManOriginal
    • 7 years ago

    ‘trims’…I see what you did there.

    I know there are lots of OCZ haters around, but I do hope they stick around. I think it was a mistake for them to move so heavily toward one product – SSDs – but since they own Indilix it would be nice to see drives continue to come out with their controllers as alternatives.

      • Waco
      • 7 years ago

      This. I have no beef with OCZ and own a few of their SSDs. It’s too bad they’ve basically stopped producing anything of worth aside from SSDs though.

        • Helmore
        • 7 years ago

        Can’t really blame them. The RAM market isn’t exactly high margin and I don’t believe they were ever really successful in the peripheral market, or any other market they have tried their hand at. The SSD market on the other hand has potential for higher margins, it will largely depend on their execution though. If they succeed, then they can become a reasonably big player in the market.

          • MadManOriginal
          • 7 years ago

          I don’t know how high margin SSDs are any more, they probably were more so when they first came out and OCZ was an early mover but now everyone and their mom makes SSDs. The only ones making ‘good margin’ on SSDs are those companies who either own production facilities (Samsung, Intel) or have true product differentiation which add value (Samsung controllers, Intel custom firmware, Corsair’s exclusive with LAMD). All the companies making what amounts to the same SSDs with the same controllers and flash aren’t making a lot. Indilix controllers kind of fall under the latter product differentiation, but aren’t *that* good, not to mention OCZ discounts everything so much they kill any margin they might have had. Maybe OCZ has some margin in their enterprise-targeted products, I don’t know how much of those they sell.

          The SSD market is becoming the RAM market in that it is all just commodified and low margin for the packaging brand.

            • BIF
            • 7 years ago

            [quote<]...now everyone and their mom makes SSDs... [/quote<] Oh good, now I can tell my dad not to worry, Mom is just making hard drives on the new fab equipment in the basement. Now we know why she doesn't cook as often as she used to. What a relief!

          • Squeazle
          • 7 years ago

          Diversity is good. When one market is down, it’s good if you have a profitable one to fall back on, even if it is small. At the very least it would diffuse the money lost on their aggressive price cutting on the SSDs.

        • siberx
        • 7 years ago

        Their move away from their traditional bread & butter (enthusiast memory) and into SSDs was very well timed and an extremely sensible move. Enthusiast memory simply doesn’t have the same value and usefulness associated with it today (due to memory controller architecture improvements, software changes and other progress) and the margins are quickly drying up there.

        SSDs represent a huge growth opportunity, but it appears OCZ was somewhat overenthusiastic with their pricing. If they have to reel that in to stay profitable, so be it – but I just hope it doesn’t mean they start moving out of the consumer space entirely, as a number of their consumer SSD products are quite good.

      • Srsly_Bro
      • 7 years ago

      I’ve owned OCZ RAM and 2 of the 4 kits I bought failed memtest with many errors. I use a different brand now and have purchased more total DIMMs and haven’t had a bad one. I say good Riddance.

        • MadManOriginal
        • 7 years ago

        They haven’t made RAM for years now. My anecdotal evidence is the opposite of yours – OCZ RAM worked fine for me in a number of builds for myself and others. Mostly standard-ish DDR2 though, and some DDR3 *shrug*

      • DPete27
      • 7 years ago

      I completely agree. Sure, their products could use more validation before hitting shelves at times. But, I think their reputation really got hurt with the Sandforce controller bug which every other sandforce SSD maker fell into as well. I think that blame should have gone on Sandforce. IMO, OCZ was the leading force behind solving the sandforce bug issue, or at least the most proactive.

      You have to give OCZ credit for driving SSD prices down though. They consistently had/have some of the most affordable 3rd-gen SSD prices around.

      • phileasfogg
      • 7 years ago

      Unfortunately for OCZ, the more appropriate headline word would have been ‘slashes’ rather than ‘trims’. A 28% RIF (reduction in force) is much more than trimming. Good luck to all of those who are affected; we hope you all land other jobs very soon.

    • dashbarron
    • 7 years ago

    Well hopefully OCZ’s products, like the SSDs, don’t suffer because of this….

      • Elsoze
      • 7 years ago

      Agreed. Maybe with less lines it will be easier to focus on the remaining products and do proper testing before they get shoved out the door.

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