Iomega has announced a net loss of $35.9 million for its second fiscal quarter.

This compares to profits of $40.4 million for the same quarter last year. Iomega will reduce its workforce by 800 to 1,100, and plans to make a five-for-one reverse stock-split.

The company blames a slower economy and an industry-wide transition from Zip and Jaz drives to less expensive CD-RW drives for backup and file exchange.

Iomega's revenue of $184.1 million for its second quarter is $119.5 million less than the $303.6 million in revenue the company drew in during the same quarter last year. This represents a 40 per cent decline in revenues.