Hard drive manufacturer, Seagate Technology, will lay off about 7 per cent of its global workforce, or about 2900 employees, under a newly-announced restructuring plan.
The company plans to reduce its operating costs by $US150 million this year, chairman and chief executive officer, Stephen Luczo, said. Part of those cuts would include staff reductions, he said.
Seagate got off to a difficult start in 2004, losing market share among notebook PC manufacturers and having to reduce hard drive prices to stay competitive with companies such as Maxtor.
The situation was exacerbated by an oversupply of notebooks in the first quarter that also affected companies such as HP and Intel.
HP said the problem had eased in its quarterly earnings conference call last month, but Seagate was still experiencing problems from that buildup in supply, Luczo said.
The company expected its mobile hard drive market share to fall by 2-3 per cent, and prices across all of its products were expected to decline 5 per cent, he said.
The restructuring did not affect any one particular group at Seagate more than another, but it was not a 7 per cent cut in each division, a Seagate spokesman said.
Employees would be notified in the coming weeks, and the layoffs would occur over the balance of this year, he said.
Part of the 7 per cent reduction includef employees who accepted early retirement packages, the spokesman said.
Seagate would take a $US50 million charge in the second quarter to account for the restructuring, Luczo said. Other steps to reduce costs are under evaluation, he said.