Hitachi, IBM to lay off 400 at hard disk drive venture

Hitachi, IBM to lay off 400 at hard disk drive venture

Hitachi Global Storage Technologies (HGST), the business created by the merger of the hard-disk drive manufacturing units of Hitachi and IBM, is to lay off about 400 workers.

The company hopes to achieve some of the staff cuts through a voluntary redundancy program for which 450 employees are eligible. Those employees have until Nov. 29 to decide, the company said. It expects around 40 percent or 50 percent of those eligible to accept redundancy which will take the company about halfway to its reduction target.

The remaining cuts will be made through firing of staff in a program due to begin on Dec. 13, it said. Staff at the receiving end of the involuntary layoff program will receive redundancy pay, medical benefits for an unspecified period and support to find a new job, said the company.

The company said the layoffs are part of continuing fine-tuning of the integration of the hard-disk businesses of IBM and Hitachi. It also said the hard-disk drive industry is very competitive and requires "very aggressive cost structures."

Hitachi paid just over US$2 billion in late 2002 to IBM to accomplish the combination of the two companies' hard-disk drive technology units. Hitachi holds a majority 70 percent stake in HGST and IBM holds the remaining stake.

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