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Seagate set to ax 1,000, shut 2 plants
BY TOM QUINLAN
Mercury News
Seagate Technologies Inc. continues to reorganize and streamline its operations, with the company confirming Friday that it will close two plants and lay off more than 1,100 employees.
The plant closings -- in Anaheim and Mexicali, Mexico -- are part of an ongoing restructuring of the Scotts Valley company that was announced last September. The two plants manufacture the components that are used in the magnetic disks for Seagate's disk-drive products.
Although the company continues to operate product development and technology centers in the United States -- including facilities in Santa Clara, Colorado, and Minnesota -- most of its manufacturing takes place in Ireland and the Far East.
Disk drives are used for long-term storage of data and software applications and are a key component of virtually every personal computer and server sold. Seagate spokesman Woody Monroy said the company decided to close the plants because it is now cheaper to buy the components from other companies than to manufacture them in-house.
Another Seagate facility making the components in Ireland will continue to operate and is expected to increase its output, Monroy added.
While the cuts were part of a fiscal 2000 reorganization plan that Seagate outlined in September, Seagate appears to be reducing its workforce far more severely than it had originally envisioned. In a December filing with the Securities and Exchange Commission, the company stated that it had plans to reduce its workforce by about 11,000 employees and that 8,000 of those jobs had already been eliminated.
In April, documents filed with the SEC indicated the company was planning to cut as many as 21,800 positions, and that 17,500 had already been eliminated.
So far, the company's employee count has shrunk from 82,000 at the end of last June to about 61,000 today.
The plant closings will be completed over the next 90 days. Seagate told employees of the move Wednesday, when the company also announced an executive reshuffling.
In the biggest change, Chief Executive Stephen Luczo relinquished the president's position to Chief Operating Officer William D. Watkins. Luczo will remain CEO and will focus on the company's strategic directions rather than day-to-day operations, the company said.
Seagate still expects to complete its complicated transaction with Veritas Software Corp. by July. In that deal, Veritas will acquire all of Seagate's assets -- including a 33 percent stake in Veritas -- and then sell the disk drive business to a group of private investors. |
