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.
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.