SiliconBeat

Seagate Technology, the disk drive manufacturer that last week said it was going to reduce its worldwide work force by about six percent, said severance costs for the approximately 2,950 employees affected by the layoffs would be about $90 million. The layoffs include a reduction of its U.S. work force of 10 percent, indicating that workers in this country are absorbing a majority of the cuts.

The company estimated that it will take a charge of about $90 million, mostly in its 2008 fourth quarter, that will consist mainly of employee termination costs.

Seagate also said it would be reducing the salaries of certain management employees beginning in February, with pay for its chief executive and other executive officers being reduced 25 percent, for its senior vice presidents by 20 percent, its vice presidents by 15 percent, and for its management, sales, supervisors and professional employees by 10 percent.

The salary cuts will save the company about $80 million, $10 million less that the cost of severance being paid out to the nearly 3,000  employees it is firing.

“One clear sign of the challenging economic environment we face is the decision by executives to take a pay cut,” according to a survey of executive pay practices by Equilar, the Redwood City information services firm that mines SEC filings for compensation data.

Of course, another “clear sign” might be the accelerating rate of layoffs. Newly announced plans to eliminate another Read the rest of this entry »