SyQuest axes half its workforce

SyQuest axes half its workforce

Removable storage drive maker SyQuest Technology intends to slash its worldwide workforce by nearly a half and expects to report a sequential drop in revenues for the quarter just completed and for the September quarter, officials revealed last Friday.

About 950 of the company's 1900 full-time workers will be laid off as part of an ongoing restructuring effort to return the company to financial health.

Most of the layoffs will be at the company's Penang manufacturing facility in Malaysia, a spokesman said. It is also believed that SyQuest also plans to end all manufacturing at its US headquarters, at a cost of more than 100 jobs there.

SyQuest blamed its troubles on an oversupply of storage products in the market, combined with shifting buying patterns of consumers who are hungry for sub-$US1000 PCs, the spokesman said.

"New buyers are buying low-cost PCs and they're leaving the stores without buying any peripherals," the spokesman said.

When it reports its third-quarter financial results later this week, Syquest expects to report lower revenues and higher operating losses than in the preceding quarter. Revenues in the second quarter of 1998 were $US47 million, and operating losses were $US29.9 million.

Revenues will likely decline further in the quarter ended September 30, 1998, when the company will also post charges related to the restructuring, SyQuest said. But the company also said it anticipates revenues to show "seasonal strength" in the quarter ending December 31, 1998.

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