Seagate fires 10,000, Quantum posts heavy losses

This story was first published on the old Register site in January 1998 The 1,400 Seagate Irish workers given their notice before Christmas, will be joined by 6,800 redundancies from plants in Singapore, Malaysia, Thailand and Indonesia. The rest will come from the United States and sales, marketing and admin jobs in all territories. The lay-offs don’t herald good news for Seagate’s official earnings announcement this week ( Jan 20). It has already said it would fail to meet previous expectations of "marginal profitability" in Q2, ending Jan 2, 1998. With redundancy and re-organisation costs, as well as big stock write-offs, Seagate will certainly get the red ink flowing. It doesn’t look too wonderful for Quantum, usually supposed to less vulnerable to market turmoil than most disk drive vendors. It posted losses of $32 million for Q3, ended Dec 28, 1997, against profits of $52.4 million the same period the year before. Quantum shipped Seven million disk drives during the quarter, pulling in revenues of $1.52 billion, up slightly from $1.48 billion in Q3, 1996. The loss is accounted for by a special charge of $79 million set against Milpitas, the company's high-end disk drive and recording head business. Without this, Quantum would have declared net income of $47 million. The charges include inventory write-offs, inventory valuation adjustments, and material purchase commitments, primarily related to the company's transition to its next generation of high-end products. "The charges were higher than the company had anticipated as a result of further deterioration in pricing in the high-end hard disk drive market and the company's desire to further reduce potential inventory exposure in response to those adverse conditions," Quantum said. It's not only the big guys who are suffering. A Dublin disk-drive component firm is closing down with the loss of 278 jobs. Applied Magnetics, which build disk head assemblies, blames the downturn in the disk drive market. ®