Seagate to cut 2,900 jobs

Hard drive manufacturer Seagate Technology will lay off about about 2,900 employees under a restructuring plan.

The company aims to reduce its operating costs by $150m (£82m) this year and part of those cuts will include staff reductions, said Stephen Luczo, chairman and chief executive officer.

In 2004, Seagate lost market share among notebook PC manufacturers and had to reduce hard drive prices to stay competitive with companies such as Maxtor.

The situation was exacerbated by an oversupply of notebooks in the first quarter that also affected companies such as Hewlett-Packard and Intel.

Seagate is still experiencing problems from that buildup in supply, Luczo said. The company expected its mobile hard drive market share to fall by 2% to 3%, and prices across all of its products are expected to decline 5%.

Employees will be notified in the coming weeks, and the layoffs will occur over this year, he said.

Seagate will take a $50m charge in the second quarter to account for the restructuring. Other steps to reduce costs are under evaluation, Luczo said.

Tom Krazit writes for IDG News Service