SINGAPORE, 15 MAY 2009 - Seagate Technology will be entering a second round of layoffs this year, as the hard disk maker announced a restructuring plan that includes a reduction of about 1,100 employees or 2.5 per cent of its global workforce.
A company spokesperson did not reveal how Seagate’s Asia operations will be affected, declining to give a breakdown of site-specific or region-specific numbers for the exercise.
All in all, the annual savings generated from this restructuring action is expected to be about US$125 million, said Seagate.
The plan is intended to push Seagate into the black in the coming months, positioning the company to be cash flow and earnings positive within its fiscal year 2010. The company said the reduction supports a targeted run rate of product development and marketing and administrative costs of less than US$300 million per quarter.
The restructuring plan, which the company expects to be largely completed by the end of July this year, is expected to result in total pre-tax restructuring charges of about US$72 million. These charges will primarily be incurred in the June 2009 quarter and consist mainly of cash-based employee termination costs which are expected to be substantially paid in the September 2009 quarter.
US workforce cut back
In January this year, the company laid off its US workforce by 10 per cent or about 800 people. In addition, Seagate previously announced the realignment of its organisational structure to increase efficiency, as well as the closures of two recording media facilities and its Pittsburgh research facility, and other cost-reduction initiatives. Seagate said it continues to assess options to further reduce manufacturing operating costs.
Since the beginning of fiscal year 2009, and including this new announcement, the company would have reduced its global headcount through attrition and restructuring, resulting in a reduction in the company’s labour costs of more than 25 per cent.
