Seagate set to let go 570 employees as it closes Milpitas manufacturing facility
Disk-drive maker Seagate Technology said it will spend $21 million to give severance to about 570 employees who will lose their jobs when it closes its media manufacturing facility in Milpitas as of Oct. 3, according to a filing with the SEC today. That works out to an average of $36,800 per employee, were all employees equal. Obviously, final results will vary. The layoffs represent about 1 percent of Seagate’s global workforce
Seagate, which maintains U.S. headquarters in Scotts Valley but is based in the Cayman Islands, estimates the move will cost it approximately $74 million, of which $36million will be hard cold cash, including the severance charge with the rest being non-cash charges for depreciation and other accounting-related costs.
The company said the action was being taken, “because Seagate can meet its recording disc requirements, through a combination of internal production and external suppliers, without the incremental cost associated with this facility,” according to an e-mailed statement from Seagate representative Elena Sexton, who stated that all of the terminated employees will be offered, according to Seagate’s policies, “a competitive severance package and outplacement assistance.”
The company said it will charge $43 million of the closure cost to its fiscal 2008 fourth quarter, which ended June 30. The balance will be charged off during fiscal 2009. Seagate said it expects the move to save it $42 million a year.
The filing finished with this odd caveat:
“Consistent with past practice, the Company’s business outlook and guidance provided on April 15, 2008, did not include the impact of this specific activity or any other restructuring, acquisitions, or stock repurchase activities to be undertaken by the Company during its fourth quarter of fiscal year 2008.”
Which begs the question: what did the company know about the restructuring as of April 15? Or about repurchase activity it expected to take during its last quarter.?
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Yeah, it’s just a ‘mental recession’ isn’t it? Tell that to all of these people who will be out of a job. ‘It’s all in your head’.
. . . and yet we American (Slicon Valley) consumers will cntinue to buy the Seagate product. If you really care about these folks, and your own job, don’t buy Seagate.
Most HD’s are make in Asia, lower costs. Another affect of the global market.
Hey Bob. WAKE UP! Another affect of the global market? That is the attitude that is very quickly bringing down this country. If not one single American shopped at Walmart and/or purchased any product from China, We the American people would be so much better off.
Does the average person in American realize our prime farm lands are almost gone - the big ones left are CORPORATE farms where numbers always out way quality - and one of those big farms is under China ownership, Yikes
These are products carreid by Whole Foods as organic that come directly from China - SPINACH…. SUGAR SNAP PEAS… AND WOULD YOU BELIEVE CALIFORNIA BLEND VEGETABLES? ALL LISTED UNDER THE WHOLE FOODS BRAND “365 ORGANIC.” AND ON THE BACK IN SMALL PRINT… PRODUCT OF CHINA.
I am sad that Americans are so involved in the latest Iphone or other “cool” product but they have absolute checked out of America’s well being. The Bush, Cheney, Rumsfeld families and the like are walking away with America’s greatness. Where have YOU been? And what will YOU DO about it?
Globalization is a reality, and it makes good business sense. Companies are squeezed to death with tight margins and have to find a way to stay afloat. Moving part of it’s business to where not only labor is cheap, but so is health care, energy, and shipping to consumners (remember China is now awake and they are hungry for our products) is a very smart move. I don’t know how many employees Seagate has(probably in the tens of thousands) but by letting go of 570 people instead of being burried in red ink or out of business period alltogether makes all the sense in the world. Those who loose their jobs will struggle for a minute, but they will find other jobs or get retrained to go into other areas. We have to remember its business and if you are not looking at the WORLD as your business play ground, you are missing out on huge opportunities for future growth.
Yup, there goes my mother’s job and more than half of our income. But what can you say, technology is unstable. Go figure for globalization and for moving all of these jobs from the U.S. to other countries. However, while these employers are getting cheaper labor and providing less developed countries with more jobs, what about HERE at home? We are no longer the unipolar superpower that we used to be, and frankly, good luck trying to find a decent job in this “recession”.
Sure we have some Toyota factories here and there (and even then its supposed to be a Japanese product, but almost everything is made oversees nowadays). But hey, a company has to do what is best for its revenue right? Life goes on.