Feeds

Maxtor to axe 400 workers

Q2 profit warning

  • alert
  • submit to reddit

SANS - Survey on application security programs

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

High performance access to file storage

More from The Register

next story
Sorry London, Europe's top tech city is Munich
New 'Atlas of ICT Activity' finds innovation isn't happening at Silicon Roundabout
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
prev story

Whitepapers

Designing a defence for mobile apps
In this whitepaper learn the various considerations for defending mobile applications; from the mobile application architecture itself to the myriad testing technologies needed to properly assess mobile applications risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.