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Seagate, Sun take steps to cut costs

Posted: 08 Jun 2004 ?? ?Print Version ?Bookmark and Share

Keywords:seagate technology? sun microsystems? desktop drives? mobile drive? sparc64 cpu?

Seagate Technology and Sun Microsystems Inc. took separate steps to reduce costs.

Amid difficult market conditions, Seagate announced it will lay off about 2,940 workers or about 7 percent of its workforce as part of plan to trim $150 million in costs annually. It did not disclose where those cuts would fall but said the plan will be implemented by the end of the year.

The company projected the overall market for desktop drives in the current quarter will be about 5 percent lower than anticipated and its share of the mobile drive market could slip about 3 percent due to supply chain problems. In addition, average selling prices of drives continues to fall about 5 percent a quarter, Seagate said.

Sun announced it will codevelop with Fujitsu Ltd a family of high-end servers using Fujitsu's Sparc64 CPU and Sun's Solaris operating system. The new servers will roll out in 2006, replacing Sun's high-end Sun Fire and Fujitsu's Prime Power servers. Fujitsu has been a Sparc licensee since 1986.

The codevelopment plan will allow Sun to focus on designing its multithreaded, multicore versions of Sparc code-named Niagara and Rock, said David Yen, who manages Sun's Scaleable Systems Group.

In a reorganization earlier this year, Sun announced it would lay off 3,300 employees. Yen was put in charge of both Sun's systems and chip design groups.

- Rick Merritt

EE Times

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