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5/22/2006
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Seagate Lays Off 6,000 As It Closes Maxtor Deal

The cuts, representing half of Maxtor's workforce, will be spread out over the next six months as Maxtor is integrated into Seagate.

MANHASSET, N.Y. — Disk drive supplier Seagate Technology LLC completed the acquisition of rival Maxtor Corp. Monday (May 22), and proceeded to lay off 6,000, or 50 percent of Maxtor’s remaining 12,000 employees.

A spokesman for Seagate (Scotts Valley, Calif.) verified an earlier Reuters report concerning the layoffs, adding that the cuts will be spread out over the next six months as Maxtor (Milpitas, Calif.) is integrated into Seagate. The spokesman added the remaining Maxtor employees serve various functions including engineering, marketing, and manufacturing.

Seagate announced in December it would buy Maxtor in a stock transaction worth $1.9 billion , following months of mounting losses for Maxtor. The deal is seen by some as part of the continuing consolidation of the disk drive business, particularly as storage moves away from traditional hard drives to memory cards.

Maxtor has continued to flounder since the announcement of the acquisition by Seagate. The company announced in April it would cut 900 jobs and post a first-quarter loss as it winds down production.

Meanwhile, Seagate, ranked by analysts as the leading disk drive supplier, has profited at the expense of its rivals. The company announced in March it would add 1,500 to 2,000 employees in Singapore as part of a business expansion there.

Seagate's total employment will be 51,000 with the addition of the Maxtor employees, a spokesman said.

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