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Seagate cuts Almost 3000 jobs Globally, reduces CEO pay by 25%

added by Michael on 14 Jan 2009

Seagate, after sliding profits for 2 quarters, announced it will be eliminating 2,950 positions and reducing CEO pay by 25%, according to Bloomberg.COM.

Profit at Seagate, which replaced its CEO two days ago, has slid for two quarters as the recession crimps personal-computer demand, causing orders for storage products to sag. Competitor Western Digital Corp. said last month it would reduce its workforce by 5 percent. Seagate has higher operating costs as a percentage of revenue than Western Digital so it may have to make more cuts, said Robert W. Baird & Co. analyst Jayson Noland.

“They’re arguably less efficient,” said San Francisco- based Noland, who has a “neutral” rating on Seagate shares and doesn’t own any. “I wouldn’t be shocked to see another cut, just given the uncertainty at Seagate right now.”

Seagate estimates the job cuts will save it $130 million a year, and the lower salaries will reduce costs by $80 million.