Technology: San Diego Only One Area Firm Is Considering for Relocation
Utah-based Iomega Corp., the company behind the Zip computer drive, has reportedly been searching San Diego for new headquarters space.
Yet company President Werner Heid says he isn’t ruling out other communities.
“We are still evaluating different locations in the state of California as well as outside the state of California, along the West Coast,” said Heid, who until recently was an executive with San Diego-based Proxima Corp.
Iomega’s search has reportedly focused on the University Towne Centre and Sorrento Mesa areas, said Erik Bruvold, vice president of the San Diego Regional Economic Development Corp.
Heid made his comments in an Aug. 9 conference call devoted mostly to management’s plans to restructure troubled Iomega, which makes high-capacity data storage drives and the disks that go in them. Among other things, Iomega plans to lay off more than one-third of its staff.
The company appointed Heid, a San Diego resident, as its CEO on June 18. Heid is the company’s fifth CEO in a four-year span.
During the conference call, an analyst asked Heid whether Iomega’s restructuring charges would go toward the company’s “expected move to San Diego.”
Heid took issue with the phrase.
“First of all, ‘expected move to San Diego’ sounds very definite,” he chided.
“Well, I just read the San Diego papers yesterday,” said the analyst.
“Yeah, so did I. So did I,” Heid said. “I just stepped out of an airplane at 6 o’clock in the afternoon in San Diego and my wife told me about it. It was interesting.”
Iomega’s possible move dominated one page of Aug. 8’s San Diego Union-Tribune. The newspaper, citing an unidentified source, said the company was searching for about 40,000 square feet of space. It also reported Heid and Iomega officials had met with officials at the city of San Diego Economic Development Division.
During the call, Heid said Iomega was setting aside some money to relocate. But he said that sum was “not so dependent on the location where you’re going to go to.”
Executives declined to give an exact amount for moving expenses, saying only they would be part of a $3 million fund labeled “other charges.”
Iomega announced Aug. 9 it would record restructuring and other charges ranging from $55 million to $65 million during the current quarter.
The company expects to lay off 1,250 employees worldwide during the second half of 2001, bringing its work force to 2,050.
Iomega has suffered declining revenues and falling stock prices. The stock closed Aug. 15 at $1.57 per share, close to its 52-week low. The stock has traded in the $6 range during the past year.
Shareholders will consider a one-for-five reverse stock split next month.
Before his appointment as CEO, Heid had a seat on Iomega’s board of directors. He is not the only San Diegan on the board. Iomega’s board president, David J. Dunn, lives in La Jolla.
Proxima, Heid’s former employer, makes multimedia projectors.