Feeds

Seagate slashes more jobs

1,100 sacrifices for $125m annual savings

Next gen security for virtualised datacentres

Seagate is cutting a further 1,100 jobs with a view to reaching break-even point, aiming to save $125m a year.

Seagate is the world's largest supplier of hard disk drives and the cuts represent 2.5 percent of its global headcount. They will get Seagate's cost down to less than $300m a quarter and, hopefully, make the firm profitable within its fiscal 2010 year.

The cost - largely in severance payments - will be about $72m, and the redundancies should be complete by the end of next month. Seagate has reduced its global labour costs by 25 percent since the beginning of 2009, with this latest set of cuts included.

It has closed two recording media facilities and its Pittsburgh research facility, as well as imposing company-wide salary reductions. Other facilities may close as the company is saying it "continues to assess options to further reduce manufacturing operating costs".

Seagate reported a loss for its third 2009 quarter, following a loss in its second quarter, and cancelled dividend payments.

All this first came to a head back in January when Seagate axed CEO BIll Watkins and chairman Stephen Luczo took over the CEO's job. Since then he has instituted a review of, and reduction of, Seagate's cost structure as it struggles with its reduced sales in the recession being insufficient to cover its manufacturing and other costs.

This was not helped by Seagate becoming less successful in the 2.5-inch, small form factor drive market, where competitor Western Digital made product sales headway with area density leadership. Seagate has since regained areal density parity in that market. Western Digital also appeared relatively more successful in the externally-attached hard drive market. Again Seagate has responded with a boosted FreeAgent line.

Luczo has also had to cope with Barracuda product quality problems.

The latest headcount reductions means that Seagate will be at its most efficient with an estimated 40 million hard drives being produced by its reduced number of employees, according to Stifel Nicolas analyst Aaron Rakers. There is no indication of where, in Seagate's operations, the headcount reductions will be made.

Coincidentally, competitor Western Digital is re-hiring people in its Thailand plants. ®

The essential guide to IT transformation

More from The Register

next story
The Return of BSOD: Does ANYONE trust Microsoft patches?
Sysadmins, you're either fighting fires or seen as incompetents now
Microsoft: Azure isn't ready for biz-critical apps … yet
Microsoft will move its own IT to the cloud to avoid $200m server bill
Oracle reveals 32-core, 10 BEEELLION-transistor SPARC M7
New chip scales to 1024 cores, 8192 threads 64 TB RAM, at speeds over 3.6GHz
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
Object storage bods Exablox: RAID is dead, baby. RAID is dead
Bring your own disks to its object appliances
Nimble's latest mutants GORGE themselves on unlucky forerunners
Crossing Sandy Bridges without stopping for breath
prev story

Whitepapers

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.
7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
BYOD's dark side: Data protection
An endpoint data protection solution that adds value to the user and the organization so it can protect itself from data loss as well as leverage corporate data.
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.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?