Seagate to Cut 800 U.S. Jobs, CEO Watkins Resigns

 
 
By Chris Preimesberger  |  Posted 2009-01-12 Print this article Print
 
 
 
 
 
 
 

Hard disk drive maker Seagate Technology is cutting 10 percent of its domestic work force. Bill Watkins, CEO since 2004, is replaced by board chairman Stephen Luczo and President and COO David Wickersham is replaced by CTO Robert Whitmore.

Seagate Technology, the world's largest maker of hard disk drives for servers, storage and PCs, became another victim of the recession Jan. 12 when it announced that its CEO and its president and chief operating officer had resigned and that it would cut 10 percent of its U.S. work force of about 8,000 people.

Corporate spokesperson Woody Monroy confirmed for eWEEK the number of layoffs and the fact that CEO Bill Watkins and President and COO David Wickersham had resigned.

Watkins, who had been CEO since 2004, was replaced by board chairman Stephen Luczo. Luczo, who held the CEO job prior to Watkins, will retain the board chairmanship he has had since 2002.

Wickersham was replaced by CTO Robert Whitmore.

Following the multiple news items, Seagate's common stock price dropped 16 percent to close at $4.76.

Click here to read about Seagate's shipping of the first single-platter 500GB disk.

Watkins may stay with the company in another capacity, Seagate said. Watkins, known as a colorful personality, made a number of media appearances last week at the Consumer Electronics Show held Jan. 8 to 11 in Las Vegas, and his resignation took people by surprise.

"Seagate has exposure to both the consumer and enterprise spending downturn and the board needed to make some difficult decisions to help the company prepare for the future," storage analyst Brian Babineau of Enterprise Strategy Group told eWEEK. "Hopefully, these changes will spur some innovation at Seagate and set the company on the path to success once the economy rebounds."

Avian Securities analyst Matt Bryson told Reuters that he was "encouraged" by Luczo's return, citing his experience with the company, but suggested that shareholders were unnerved by the one-two punch of Watkins' fall and Wickersham's departure.

"It is the COO resignation (in addition to the CEO), that leaves questions around management stability," Bryson told the news service. However, Bryson maintained his "positive" rating on the Seagate stock.

Storage companies in general have weathered the downturn fairly well, based on the last few quarterly reports. EMC had been the only storage-only vendor to announce layoffs until Seagate's news.

 
 
 
 
Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz
 
 
 
 
 
 
 

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