Disk drive maker Maxtor Corp. said that the company would trim up to 500 positions worldwide in a bid to cut costs as part of a lowered earnings forecast.
Disk drive maker Maxtor Corp. said Thursday evening that the company would trim 400 to 500 positions worldwide in a bid to cut costs, part of a lowered earnings forecast.
Maxtor said second-quarter price declines would drop the average selling price for a disk drive to about $71, $4 below the first quarter and significantly below expectations. Maxtor expects to report a loss of between $20 million to $30 million on revenue of $820 million to $825 million.
Maxtor said it expects to ship about 11.6 million disk drives this quarter, about 10 percent below expectations.
Maxtor hasnt suffered alone. In early June, competitor Seagate Technology LLC said it would cut 2,900 jobs as it, too, tried to cut costs.
The layoffswhich will total between 400 and 500 positions worldwidewill save the company approximately $60 million to $80 million annually, Maxtor officials said. These actions will begin in the third quarter, with the majority completed by year-end.
"We are extremely disappointed in our second-quarter performance, which was the result of a very aggressive pricing environment in both the OEM and distribution channels and lower than expected unit shipments, primarily to distributors," said Paul Tufano, president and CEO, in a statement. "During the quarter, we took steps to control costs and expenses to partially offset the shortfall in volume and revenue. We will continue our efforts to cut costs and lower the breakeven point of the company through a reduction in force, beginning this month."
In other drive news, Seagate officials said the company had filed a petition with the International Trade Commission to attempt to block tiny-drive maker Cornice Inc. from shipping products into the United States. Western Digital Corp. and Seagate both have filed patent-infringement suits against the company.
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