Seagate executive sees 10 percent cut to U.S. workforce
LAS VEGAS |
LAS VEGAS (Reuters) - Seagate Technology Inc (STX.O), the world's largest hard-disk drive maker, is planning to cut around 10 percent of its U.S. workforce in a restructuring program to be announced later this month, a company executive said.
Seagate's overall workforce is roughly 54,000, and the majority of its employees and operations are in the U.S., Brian Dexheimer, president of the company's consumer division, told Reuters in an interview at the Consumer Electronics Show in Las Vegas this week.
The hard disk drive industry has felt the brunt of the global economic slowdown, with demand for personal computers and other electronic products weakening due to soft corporate and consumer spending on technology.
Dexheimer said the overall hard disk drive industry took a "pretty good shock to the system" in the latter part of 2008, when demand collapsed.
"We are preparing for a pretty tough environment here over the next 12 months," he said.
Industry tracker iSuppli said in early December that industry-wide hard disk drive unit growth could be as low as 4.3 percent in 2009 under its most pessimistic scenario.
Dexheimer also said he expects Seagate's restructuring to affect its research and development budget.
In December, Seagate slashed its outlook for the January quarter and said it would institute a company-wide holiday shutdown amid weakening demand.
Seagate and main rival Western Digital Corp WDC.N are the world's two largest hard disk drive suppliers, with around 60 percent of the market.
Last month, Western Digital announced plans to cut 5 percent of its workforce, or 2,500 employees, to trim costs.
(Reporting by Gabriel Madway, editing by Tiffany Wu)
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