Feeds

Maxtor to axe 400 workers

Q2 profit warning

  • alert
  • submit to reddit

Providing a secure and efficient Helpdesk

Hard drive maker Maxtor today announced that its second fiscal quarter results will be "extremely disappointing", with the company set to become a casualty of pricing warfare. In response, it is axeing 400-500 workers worldwide - up to 3.7 per cent of its 13,500 staff.

Maxtor competitor Seagate has already announced the loss of 3000 jobs, for similar reasons.

Maxtor is set to publish its Q2 2004 figures on 21 July, but it's already warning that the three months to 26 June will produce a GAAP loss of $20-30m (between eight and 12 cents a share). That contrasts with Q1's GAAP income of $9.2m (four cents a share) and Q2 2003's figure, $6.2m (three cents a share).

The Q2 2004 is even worse than it sounds - had the hard drive maker not gained $24.8m through its legal battle with Philips, it would have lost $40-50m (16-20 cents a share).

At the heart of the matter are reduced quarterly sales. Q2 revenues will total $820-825m on the back of 11.6m units shipped. This time last year, the company achieved sales of $910.9m, shipping 12.2m hard drive products. During Q1, Maxtor shopped 13.6m hard drives, yielding revenues in excess of $1bn. Q2 2004's figure represents a sequential and year-on-year decline of up to 19.6 per cent and ten per cent, respectively. Unit shipments fell 4.9 per cent and 14.7 per cent, respectively - and ten per cent below company forecasts.

According to Maxtor, the quarter's average selling prices are likely to come to $71, down $4 on Q1 and well below what the company had forecast.

Maxtor president and CEO Paul Tufano vowed to continue cutting costs in the face of declining prices. The redundancies he announced will save the company $60-80m, the company said. The restructure will take place mostly in Q3 and finishes in Q4. ®

Related stories

Seagate axes thousands
Seagate thins product line in black ink bid
Western Digital sues Cornice
Seagate gets litigious with small hard drive rival

Beginner's guide to SSL certificates

More from The Register

next story
Scrapping the Human Rights Act: What about privacy and freedom of expression?
Justice minister's attack to destroy ability to challenge state
WHY did Sunday Mirror stoop to slurping selfies for smut sting?
Tabloid splashes, MP resigns - but there's a BIG copyright issue here
Google hits back at 'Dear Rupert' over search dominance claims
Choc Factory sniffs: 'We're not pirate-lovers - also, you publish The Sun'
EU to accuse Ireland of giving Apple an overly peachy tax deal – report
Probe expected to say single-digit rate was unlawful
Inequality increasing? BOLLOCKS! You heard me: 'Screw the 1%'
There's morality and then there's economics ...
Hey Brit taxpayers. You just spent £4m on Central London ‘innovation playground’
Catapult me a Mojito, I feel an Digital Innovation coming on
While you queued for an iPhone 6, Apple's Cook sold shares worth $35m
Right before the stock took a 3.8% dive amid bent and broken mobe drama
EU probes Google’s Android omerta again: Talk now, or else
Spill those Android secrets, or we’ll fine you
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.