While most of its employees were away celebrating the turn of the year, EMC Corp.’s legal team spent last Thursday filing the paperwork for an $850 million restructuring initiative that is set to cost many of the holidaymakers their jobs. The layoffs aim to ease the logistical burden on the storage giant ahead of its much-anticipated merger into Dell Inc., which is also doing its part to streamline the process.

The company is reportedly in talks with a group of private investment firms to offload three secondary businesses that together employ tens of thousands of workers. The biggest, Perot Systems, may fetch as much as $6 billion, while the other two are anticipated to add another $4 billion to the cash pile. Yet the workforce reductions from the sale may still pale in comparison to the upcoming layoffs at EMC.

The vendor didn’t divulge the specific number of positions that will be eliminated as part of the restructuring, but the SEC filing in which the move was disclosed states that a massive $250 million has been set aside to cover severance payments and related termination costs. Even more alarming is the fact EMC expects to spend the bulk of the sum, $220 million, in the first quarter even though its acquisition by Dell is only set to complete in October. The urgency of the move suggests additional rounds of layoffs may be in the pipe.

The restructuring will likely focus primarily on EMC’s storage arm, which is both its largest and slowest-growing business. The division saw sales dip two percent last quarter due to stagnating demand for the traditional disk-based systems that generate the bulk of its income, a trend that reportedly also led IBM Corp. to cut 475 jobs in its competing array business last month. That’s hardly an encouraging sign for workers.

On the plus side, however, their colleagues at VMware Inc. and Pivotal Software Inc. probably won’t feel the impact of the layoffs to the same extent. Both are growing at a comfortable pace and Michael Dell has explicitly made the divisions a part of his growth plan, which provides a lone bright spot in an otherwise bleak new year’s outlook for the EMC workforce.

Photo via steinarhovland