Feeds

So when did the knives come out at Seagate?

To lose one C-level exec may be regarded as a misfortune...

Boost IT visibility and business value

Immediate future

The Seagate SEC filing said: "Seagate plans to reduce approximately 10-percent of its U.S. workforce in a restructuring program to be announced later this month, when it has notified the affected employees. This restructuring will impact a broad range of departments, including research and development, and is being done in response to the current economic environment." The 10 per cent cut referred to just the US workforce, not the world-wide headcount, meaning about 800 people. Seagate felt it necessary to put the clause in about R&D restructuring. Seagate may now be preparing a more wide-ranging restructuring than Watkins, and possibly Wickersham, would have contemplated. Again we are speculating here. The elements of such a restructuring could include:

- Moving production capacity from high-cost plants to lower-cost ones and moth-balling or closing the idle plants. It is easier to do such things outside the USA and western Europe
- Preparing to lay off more workers (more than 10 per cent)
- Planning a longer-term restructuring of manufacturing to move more of it into low-wage economies in the Far East. This puts plants such as the Londonderry one in North Ireland, and USA plants such as Shakopee and Bloomington, at risk
- Combining the two separate external hard drive lines into one
- Bringing the R&D horizon closer and looking only, say, at the next two generations of hard drive technology and not three or four
- Accelerating the switch to 2.5-inch drives
- Delaying or closing the solid state drive development work. (On the other hand this could be actually accelerated as it is potentially high growth.)

With cash conservation and cost-cutting the likely two main drivers of Seagate's activities over the next couple of quarters, an acquisition of Fujitsu's HDD business looks to be completely off the table.

The company is due to report its fiscal Q2 results (the last calendar quarter for 2008) on January 21. Whitmore, the new COO, will have an awful lot of detailed work to do so that Luczo and O'Malley can present a coherent and clear picture of how Seagate is responding to the results, which may include a loss. Are we looking at revenues of $2bn, or less and possible negative net income of $0.1 -$0.05/share for the quarter?

®

Boost IT visibility and business value

More from The Register

next story
Pay to play: The hidden cost of software defined everything
Enter credit card details if you want that system you bought to actually be useful
HP busts out new ProLiant Gen9 servers
Think those are cool? Wait till you get a load of our racks
Shoot-em-up: Sony Online Entertainment hit by 'large scale DDoS attack'
Games disrupted as firm struggles to control network
Community chest: Storage firms need to pay open-source debts
Samba implementation? Time to get some devs on the job
Like condoms, data now comes in big and HUGE sizes
Linux Foundation lights a fire under storage devs with new conference
Silicon Valley jolted by magnitude 6.1 quake – its biggest in 25 years
Did the earth move for you at VMworld – oh, OK. It just did. A lot
prev story

Whitepapers

Gartner critical capabilities for enterprise endpoint backup
Learn why inSync received the highest overall rating from Druva and is the top choice for the mobile workforce.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.