Seagate to slash up to 10 per cent of its staff

[FarCenter]

http://www.theregister.co.uk/2009/01/12/seagates_ten_percent_cull/

...

In early December Seagate, the world leader in the hard disk drive market, lowered its quarterly revenue forecast to a $2.3bn - $2.6bn range, from an earlier $2.85bn - $3.05bn one, and announced plans to rationalise its structure and rebalance its costs. This was in response to a substantial fall in quarterly revenues and worsening of demand prospects. As the recession has worsened, Seagate is strengthening its response.

Western Digital, number two to Seagate in the hard disk drive market, announced its own cutbacks, including up to 2,500 job losses, a five per cent cull, in mid-December. Japanese HHD head manufacturer TDK is cutting up to 9,000 jobs after it reported a $304m annual loss. The company's experience mirrors that of Seagate - president Takehiro Kamigama, is quoted as saying: “Starting in November, demand for electronic components in all markets dropped significantly, followed by an even more precipitous fall in December."

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Brian Dexheimer, in charge of Seagate's consumer products, told Reuters at CES in Las Vegas last week that up to ten per cent of the company's staff could be laid off. A restructuring could involve the closure of plants to reduce product capacity, reduction in research and development spending, and the loss of up to 5,400 jobs. It is expected to be announced later this month.

Watkins thinks that the HDD industry could consolidate to Seagate, Western Digital and Hitachi, with one other Japanese player formed from some combination of Fujitsu's HDD business, which it has been trying to sell to Western Digital, Toshiba and TDK. This indicates that Samsung's HHD business has no future in Watkins' view. Seagate sees no reason to buy up rivals - it is sink or swim time.

[Davis_X_Machina]

1. Seagate previously announced an intention to close...

...their Pittsburgh R&D operation, and are looking to sell their six-year old building in the Strip district.

[FarCenter]

2. In their 10K they show a lease obligation

Although the building may be a purchase-leasback to a captive SIV.

Seagate is a Cayman Island corporation, after all.