Mired in red ink and unable to create any momentum whatsoever, disk-drive manufacturer Komag Inc. (Nasdaq: KMAG) said Wednesday it will layoff 480 more employees and shut down two manufacturing plants.
Company officials said it will shutter its two manufacturing sites in San Jose, Calif., leaving 480 of its 1,050 U.S. workers out of a job.
It's going to take a huge charge in its third quarter, but it's still unclear just how much these layoffs and plant closures will cost.
Its Malaysian facility will now manufacture all of its drives.
"Under the accelerated phase down plan we will quickly transfer production activities from San Jose to our low-cost manufacturing facilities in Malaysia," said CEO T.H. Tan in a prepared release. "This accelerated shift of production volume into our cost-advantaged Malaysian plants will improve the company's overall cost structure, result in lower unit production costs, and generate substantial cash savings in future periods."
Komag will move all of its research and development efforts to its Santa Rosa, Calif. site.
After starting the year with close to 2,000 U.S.-based workers, Komag will close the quarter with a scant 570 American employees.
Last quarter, Komag lost $49 million, or $1.83 a share after announcing it would layoff 400 employees.
At the time, company officials blamed intense pricing pressure and sluggish demand for the disappointing results.
Komag's stock, which closed off 1/16 to 3 9/16 Wednesday, has almost reached the point of irrelevance.
Its shares hit a 52-week high of 15 5/8 in January after falling to a low of 2 in October.
Three of the five analysts following the stock rate it either a "hold" or a "buy."