Quantum not expecting job cuts
By Reuters
January 16, 1998, 5:50 a.m. PT
SINGAPORE--Quantum (QNTM), the world's second biggest independent disk drive maker, does not expect to cut any more jobs despite the continuing difficult conditions in the industry, a senior executive said today.
"I do not foresee that at all," David Rawcliffe, Quantum's Asia Pacific marketing director, said when asked if the company would cut jobs.
In November, Quantum cut 50 jobs as part of a reorganization of its hard disk drive business. On a worldwide basis, Quantum employs 7,600 people on its staff, of which 1,570 are in Asia. This does not include staff from its Japanese partner, Matsushita Kotobuki Electronics, which manufactures for Quantum, Rawcliffe said in a telephone interview. Manufacturing is done in three sites in Singapore, Japan, and Ireland.
Yesterday, Quantum competitor Seagate Technology (SEG) announced that it would axe 10 percent, or 10,000 employees, from its global workforce.
Seagate said it was laying off 1,800, or about 10 percent, of its Singapore employees, and that it was planning to take a $300 million charge for the restructuring.
Rawcliffe said Quantum shipped a record number of disk drives during the fourth quarter of 1997, a period that was very competitive for the industry. Nevertheless, price pressures due to an oversupply hurt Quantum's earnings during that period.
Yesterday, Quantum reported a loss of $32 million for the fiscal third quarter ended December 28, 1997. The company said that the loss came from a restructuring charge of $74 million, and that operating profits were weaker because of a collapse of prices of personal computer disk drives.
Rawcliffe said it was too early to tell if the company would return to the black in the current quarter.
"All we can really do is to review what the market conditions were like in the three months that has just ended," he said, adding that Quantum was forecasting flat to slightly lower production for the current quarter.
Quantum had restructured to merge its desktop and high-end divisions in order to take advantage of its success in desktop products, Rawcliffe said. He added that, although the oversupply situation was more apparent in the high-end segment of the market, Quantum was not looking to focus more on desktop products.
"Actually, we would like to see [the desktop efforts] decrease as we diversify and increase revenues in other segments," he said.
Desktop products now make up 75 percent to 80 percent of Quantum's worldwide revenue, and about 85 percent of its Asian sales. Asia, excluding Japan, contributes 18 percent to 22 percent of Quantum's worldwide revenues, Rawcliffe said. The company has about an 8 percent market share in high-end disk drives and 26 percent to 27 percent share in desktop products.
On high-end drives, he said: "From our current 8 percent, we'd like to see us exit 1998 with around a 15 percent share."
Seagate has seen its market share in the high-end segment eroded from 60 percent, but has said it intends to keep its share above 50 percent.
Rawcliffe said that Asia's demand for Quantum's products had been dented during the last quarter of 1997 as the region's economic crisis deepened.
To counter this, Quantum would intensify its efforts in markets like China and India and look for different types of customers that were diversified enough to ride out the crisis, he said. |
