Feeds

Seagate cuts go deep

3,000 axed - not 800

Secure remote control for conventional and virtual desktops

Going further than its previous 10 per cent US workforce cut targeted by a recent SEC filing, Seagate has made another filing saying 6 per cent of its worldwide workforce will go and executives and other professionals will take pay cuts.

This comes two days after the replacement of its CEO, Bill Watkins, and COO, David Wickersham, had been announced.

The SEC filing says: "The Plan includes reducing worldwide headcount by approximately 2,950 people, representing approximately 6 per cent of its global employee headcount, which is inclusive of the previously disclosed 10 per cent reduction of the U.S. workforce." Previously it had been reported that a worldwide 10 per cent cut was expected.

The filing continues: "The Plan, which the Company expects to largely complete by the end of the March quarter, is expected to result in total pretax charges of approximately $90 million. These charges will primarily be incurred in the December 2008 quarter, and will consist mainly of employee termination costs, with the majority of cash payments expected to be paid in the March 2009 quarter. The savings generated from these restructuring activities are expected to amount to approximately $130 million annually."

It goes on to say: "In connection with the Company’s overall cost reduction strategy, the Company expects to reduce salaries of certain employees, including its named executive officers, as follows: 25 per cent for Chief Executive Officer, Named Executive Officers and Executive Vice Presidents, 20 per cent for Senior Vice Presidents, 15 per cent for Vice Presidents, and 10 per cent for management, sales, supervisors and professional employees. The salary reductions are expected to be finalized shortly and become effective in February 2009. The estimated savings generated from these salary reductions are expected to amount to approximately $80 million annually."

The total savings look to be $210 million annually.

So the potential faultlines of the disagreements between Watkins and the board are emerging, with 800 US jobs now subsumed into 2,900 worldwide jobs going, 6 per cent of its global headcount. These are in the same areas as Western Digital's 5 per cent cut, which is being accompanied by manufacturing plant shrinkage. It is expected that more details will come out about Seagate's plans and they will possibly include some kind of manufacturing capacity reorganisation.

Some analysts expect more cuts later this year.

The Springtown hard drive component plant at Londonderry in Northern Ireland will lose up to five people it is reported. About 450 people, a third or so of the 1,400 workforce, mostly salary-grade professionals, will suffer a 10 per cent pay cut. It could have been worse. 1,900 jobs are set to go at Dell's Limerick plant as the manufacturing moves to Poland. This Seagate salary grade pay cut is part of the worldwide pay cut for such staff.

The new COO, Robert Whitmore, will have his work cut out as he assimilates his new area of responsibility and works out what can and can't be done. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
Bladerunner sequel might actually be good. Harrison Ford is in it
Go ahead, you're all clear, kid... Sorry, wrong film
Euro Parliament VOTES to BREAK UP GOOGLE. Er, OK then
It CANNA do it, captain.They DON'T have the POWER!
Musicians sue UK.gov over 'zero pay' copyright fix
Everyone else in Europe compensates us - why can't you?
I'll be back (and forward): Hollywood's time travel tribulations
Quick, call the Time Cops to sort out this paradox!
Megaupload overlord Kim Dotcom: The US HAS RADICALISED ME!
Now my lawyers have bailed 'cos I'm 'OFFICIALLY' BROKE
Forget Hillary, HP's ex CARLY FIORINA 'wants to be next US Prez'
Former CEO has political ambitions again, according to Washington DC sources
prev story

Whitepapers

10 ways wire data helps conquer IT complexity
IT teams can automatically detect problems across the IT environment, spot data theft, select unique pieces of transaction payloads to send to a data source, and more.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
How to determine if cloud backup is right for your servers
Two key factors, technical feasibility and TCO economics, that backup and IT operations managers should consider when assessing cloud backup.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.