Feeds

Seagate slashes more jobs

1,100 sacrifices for $125m annual savings

Securing Web Applications Made Simple and Scalable

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
Manic malware Mayhem spreads through Linux, FreeBSD web servers
And how Google could cripple infection rate in a second
EU's top data cops to meet Google, Microsoft et al over 'right to be forgotten'
Plan to hammer out 'coherent' guidelines. Good luck chaps!
US judge: YES, cops or feds so can slurp an ENTIRE Gmail account
Crooks don't have folders labelled 'drug records', opines NY beak
FLAPE – the next BIG THING in storage
Find cold data with flash, transmit it from tape
Seagate chances ARM with NAS boxes for the SOHO crowd
There's an Atom-powered offering, too
Gartner: To the right, to the right – biz sync firms who've won in a box to the right...
Magic quadrant: Top marks for, er, completeness of vision, EMC
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Mobile application security vulnerability report
The alarming realities regarding the sheer number of applications vulnerable to attack, and the most common and easily addressable vulnerability errors.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.