Seagate Rehires Former Employees to Meet Demand

Posted on April 1, 1998 
Filed Under AsiaBizTech, Julian

by Julian Matthews

April 1, 1998 (KUALA LUMPUR) — Seagate Technology is rehiring former employees on a temporary basis after laying off more than 2,000 people in its Malaysia plants in February.

The move is to meet last- minute product orders to be shipped by June from its Prai assembly plant, said Penang Seagate Industries (M) Sdn., Bhd. managing director Timothy Harris.

The company already has recruited 130 ex-staff by offering them their last drawn salary for temporary employment of between one and three months. It has another 170 more vacancies to fill.

Seagate Malaysia’s manpower shortage was a direct result of a global retrenchment exercise carried out in February that triggered higher-than- expected attrition.

The company offered retrenchment benefits of between two months and 12 months salary for those who resigned voluntarily. “After the restructuring, the people who left were more than we expected,” said Harris.

As of Feb. 16, Seagate had laid off 1,791 Malaysia staffers and 400 Indonesians from its plants in Penang, Prai and Ipoh.

Seagate Malaysia, in an earlier statement, had stated it only planned to cut 750 indirect staff from its payroll.

The layoffs were part of the 10,000 jobs Seagate planned to slash worldwide in a bid to restructure operations after a shortfall in revenues.

The global disk drive industry is reeling from a supply glut, weak demand and intense pricing pressures. Leading U.S. suppliers Seagate, Western Digital Corp. and Quantum Corp. are facing stiff competition from Asian suppliers Fujitsu Ltd., Samsung Group and Hyundai Group.

In December 1997, Seagate had announced it would shut down a plant in Clonmel, Ireland and fire 1,400 workers, sparking fears that Asian plants would be similarly affected.

Harris reaffirmed the company will not shut any of its Malaysia plants. “Our plans to transfer additional high technology products and processes into Malaysia also remain unchanged,” said Harris, who is also a senior vice president of the company.

Seagate Malaysia currently has a work force of 17,000.

The company discontinued head stack and head gimbal assembly manufacturing as of February, but it continues to manufacture disk drives in Prai and recording heads in Penang and Ipoh and to assemble printed circuit boards in Johor.

Published in Asia BizTech, Apr 01, 1998

by Julian Matthews, Asia BizTech Correspondent

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