Seagate To Fire 10,000 Worldwide
Seagate Technology Inc. stock was down more than 3 percent this morning after the largest independent maker of computer disk drives said it is cutting 10,000 jobs, mostly in Asia, in a struggle against industry competition.
The 10 percent reduction in Seagate’s 100,000-person work force, including 1,350 U.S. jobs, comes after two quarters of falling sales amid a worldwide glut that has driven down prices of the company’s products.
In early trading on the New York Stock Exchange, Seagate stock was down 62 1/2 cents at $19 a share. The job cuts were disclosed after stock markets closed Thursday.
Seagate had already announced it would set aside more than $300 million to pay for a restructuring of its work force.
Seagate, based in Scotts Valley, Calif., is closing two Southern California design centers, in San Jose and Moorpark, and consolidating their operations with offices in Longmont, Colo., and Oklahoma City.
The reductions also include 1,400 job cuts already announced in December with the closing of a disk drive manufacturing plant in Ireland.
Seagate’s cuts of more than 7,000 jobs in Asia, including Thailand, Singapore, Malaysia and China, are the latest cutbacks by U.S. companies since the region’s economy began plummeting last fall. U.S. high-tech companies such as Intel and Motorola already have reported lower profits in part due to Asia’s woes, which have hurt consumer demand for U.S. products.
Still, a Seagate spokeswoman said the firm only sells 16 percent of its products in the Far East.
After expanding rapidly in the early 1990s, Seagate recently has suffered against the onslaught of competitors such as IBM and Fujitsu. In the recent six months, Seagate’s sales have plunged to $1.9 billion from $2.5 billion.
Seagate’s latest quarterly financial results are due out next Tuesday.