Seagate Layoffs Grow From 800 to 3,000

By ASHLEE VANCE

Seagate, a leading hard-drive maker, will conduct a far more drastic round of layoffs than the company had indicated earlier this week.

Close to 3,000 people, or 6 percent of Seagate’s global work force, will lose their jobs in the next couple of months, the company said Wednesday in a regulatory filing. On Monday, Seagate revealed plans to lay off about 10 percent of its United States work force, or close to 800 people. It has now expanded those plans to include the broader layoffs, which affect its workers across the globe.

The layoffs come as Seagate tries to negotiate a management overhaul and deal with falling sales of PCs and servers, which use the company’s hard drives. Seagate lost its two top executives on Monday when it dismissed the chief executive, William D. Watkins, and accepted the resignation of David A. Wickersham, the company’s president and chief operating officer.

Analysts have criticized Seagate for losing ground to major rival Western Digital over the last couple of years, particularly in the markets for laptop and consumer PC hard drives.

In addition, Seagate has puzzled customers and analysts by failing to elaborate on its plans to produce new solid-state hard drives, which use flash memory rather than spinning disks. The flash drives, while more expensive than conventional drives, have higher data transfer speeds and lower power consumption, appealing to server customers willing to pay for top performance and to consumers buying high-end laptops.

Seagate has said it plans to ship S.S.D.’s this year, although it has yet to reveal which company will supply it with flash memory for the products. Meanwhile, competitors like Toshiba and Samsung use their own memory in S.S.D.’s, and Hitachi has turned to Intel for memory.

Beyond the product issues, Seagate is suffering from a decline in computer sales that’s punishing its rivals and other companies that make PC components like Intel and Nvidia.

In December, Western Digital laid out plans to fire 5 percent of its staff, or 2,500 people, while also closing a manufacturing plant in Thailand and cutting executive pay. Intel warned this month that its fourth-quarter revenue will fall 23 percent year-over-year. And Nvidia projected this weekthat its fourth-quarter revenue could drop as much as 50 percent when compared to the third quarter.