Maxtor to cut up to 5,500 jobs in Singapore

Maxtor to cut up to 5,500 jobs in Singapore

Maxtor will cut up to 5,500 jobs in Singapore as a result of the closure of one of its two hard-disk factories there.

Maxtor's shift of some enterprise hard-disk drive manufacturing from Singapore to China would result in the loss of up to 5500 jobs in the city-state, the company has said in a regulatory filing.

The company said it expected to close one of its two factories in Singapore before the end of the first quarter of 2006.

Maxtor had already announced plans to invest $US200 million over five years to build a manufacturing facility in Suzhou, China.

Of the up to 5500 positions that would be lost, Maxtor said about 2500 were expected through attrition. The remainder would be accomplished though layoffs.

"This relates to our strategy to move the majority of enterprise desk top drive manufacturing to our facility in China," chief financial officer for Maxtor, Duston Williams,said.

"As a result of the closure we will recognise about $US12 million in severance costs in Q1 2005," he said.

"The plan has been announced to the Singapore team and we are in the early stages of its execution."

Maxtor is one of the world's largest manufacturers of hard-disk drives and is currently executing a "100-day plan" that has the aim of streamlining the product road-map, reducing operating expenses and improving the company's cost-structure.

The plan was announced shortly before Maxtor reported lower sales and a net loss for the fiscal year that ended on December 25, 2004.

Net sales for the year were $US3.8 billion, down 7 per cent on the previous year, and the company recorded a $US182 million net loss for the year compared to a $US103 million net profit for the previous year.

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