Seagate deepens job cuts

 

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By Stuart Turton

Posted on 15 Jan 2009 at 11:27

Seagate says it will be axing around 3,000 jobs worldwide, a startling increase on the 800 originally announced.

The cuts were revealed in an SEC filing which stated: "The plan includes reducing worldwide headcount by approximately 2,950 people, representing approximately 6% of its global employee headcount, which is inclusive of the previously disclosed 10% reduction of the US workforce."

This is the second filing Seagate has made to the SEC. The original statement claimed it would be laying off 800 people in the US. Since then, however, the company has replaced its CEO, Bill Watkins, and COO, David Wickersham, and it appears the new management is committing to a much harder line than their predecessors.

This is also evident in the company's plan to slash executive salaries, including those of its new CEO, by as much as 25%, as it grapples with slowing consumer demand. These salary cuts are expected to save the hard-drive manufacturer approximately $80 million annually, with total savings for all measures hitting $210 million annually.

The filing continues: "The plan, which the company expects to largely complete by the end of the March quarter, is expected to result in total pretax charges of approximately $90 million.

"These charges will primarily be incurred in the December 2008 quarter, and will consist mainly of employee termination costs, with the majority of cash payments expected to be paid in the March 2009 quarter."