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Quantum sheds 800 jobs worldwide

Announces $50m reshuffle in the face of stiff competition

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Quantum is to slash 800 jobs and re-jig its hard disk drive business following the onslaught of cheaper PCs and stiff pricing from rivals. The company said it would cut 13 per cent of staff due to increasing competition in the market and the growing popularity of sub-$750 computers. In a company statement, Quantum said it would take a $50 million charge in the quarter ending 26 September for the cuts, aimed at saving the company $100 million annually starting in fiscal 2001. 115 staff will go immediately, with the rest leaving over the next year from facilities in Milpitas, California, and Dundalk, Ireland. About 615 of the jobs will be lost from the Milpitas operation, or about 26 per cent of staff there. "The goal of this restructuring is to quickly adapt our business to the changing needs of our PC customers," said John Gannon, president of Quantum hard disk drive group. "The growth of the low-cost PC market has become a challenge for virtually every company in the PC supply chain, and Quantum is no exception. "However, we view this high growth segment of the disk drive market as a huge opportunity, and we are confident that the changes we're implementing now are going to position us strongly for the future in this important market segment," added Gannon. Quantum employs around 6,000 staff worldwide, with over 4,000 of these employed in its disk drive business. Brown said the moves, announced yesterday, were designed to adapt Quantum’s business to the low-cost PC market, as increasing numbers of customers were shifting from custom to standard configuration drives. However, he added that the changes were not expected to combat the short-term effects of competitive pricing from rivals in the disk drive market. "On that front, Quantum will continue to speak out strongly against the destructive pricing practices that are plaguing our industry," said Brown. Last week, Quantum hit out at Seagate, accusing it of selling products at below cost price. ®

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