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Seagate to lay off thousands

Seagate Technology will slash another 8,600 jobs worldwide, greatly expanding cost-cutting efforts as demand for its products continues to stall.

Seagate Technology (SEG) today said it will slash another 8,600 jobs worldwide, greatly expanding cost-cutting efforts as demand for its products continues to stall.

The layoff announcement adds to Seagate's earlier statement that it would cut 1,400 jobs. All of the layoffs will take place before the end of the March quarter, reducing the storage and network management software manufacturer's worldwide workforce by a total of 10 percent.

The majority of the layoffs will be in the Asia Pacific region, but the company also will consolidate its five U.S. research and development facilities into three. Seagate's research facilities in San Jose, California, and Moorpark, near Los Angeles, both will be closed.

Those two facilities will be combined with operations in Longmont, Colorado, and Oklahoma City, Oklahoma, centralizing the company's product design and research centers. The fifth center, which will not be a part of the consolidation, is located in Twin Cities, Minnesota.

The company said in December that it would close a drive manufacturing plant in Clonmel, Ireland, and fire 1,400 workers there. Those layoffs, however, did not go far enough to offset shrinking demand for Seagate's products.

"Right now the market is characterized by intense competition," said Julie Still, a Seagate spokeswoman. "We have to adjust to meet market demands. If you manufacture fewer drives, you have to have a smaller workforce."

The layoffs will be across all employee levels, and most will occur in the Asia/Pacific region. The company is not closing any manufacturing plants in the area, just trimming staff at a variety of plants.

The layoffs will take place within the next 60 days, and will continue throughout the remainder of the current quarter. Seagate notified U.S. employees that will be affected today, and will inform the rest beginning tomorrow.

Still said the 10,000-employee job reduction is the last of the company's staff cutbacks. The restructuring includes previously announced charges in excess of $300 million, of which $250 million will be taken in the December quarter. The balance will be taken in the March quarter.

Seagate expects to report its second-quarter financial results on January 20, after the markets close. Analysts are expecting a loss of 25 cents a share, according to First Call. Last year the company reported profits of $212.6 million, or 91 cents a share, beating Wall Street's expectation of 73 cents a share.

The company's stock has lost about 50 percent of its value since October, when it was trading near 40 cents per share. Today the stock closed at 19-5/8, up 1/2.