Struggling storage maker Quantum has announced a move to combine two of its divisions and to trim about 5 percent of its workforce, hoping to spur some cost savings.

The DLTtape group and Storage Solutions Group (SSG) will now operate as a single organization with three business units - storage devices, media and storage systems. As a result, close to 110 employees and 20 contractors will spend their holidays in the unemployment line. Quantum expects to take charges of between $10 million and $15 million for the restructuring move.

“Over the past year, we’ve made progress in a number of areas, including gaining market share, increasing our tape drive revenue and gross margins, growing our automation revenues and reducing operating expenses,” said Rick Belluzzo, CEO at Quantum.  “The changes announced today will enable us to build on this progress by combining our strengths across Quantum to serve customers even better, further reduce costs and provide greater opportunities for growth.”

John Gannon who was the president of the DLTtape group will now run the new organization and take on the role of president and COO at the company.

Belluzzo was hired back in 2002 to revitalize Quantum but has fallen on tough times since taking over. The former Microsoft President, HP exec and SGI CEO has had to deal with falling tape prices and a sluggish business overall.

For its upcoming December quarter, Quantum expects to take a loss of between 14 cents and 17 cents per share. ®