X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

SCOTTS VALLEY, CA-Locally based Seagate Technology said Wednesday it plans to cut its global workforce by 2.5%, which represents approximately 1,100 people. The hard disk drive maker, which has executive, administrative and manufacturing facilities in Northern California, says additional restructuring actions also are likely.

Seagate occupies some 9.6 million square feet globally, two-thirds of which is industrial and the remainder split fairly evenly between product development and administration. The company is headquartered in the Cayman Islands but keeps its executive offices in Scotts Valley, which sits between San Jose and Santa Cruz, and also leases office space in Milpitas, which sits just north of San Jose.

Seagate’s principal disc drive design and research and development facilities are located in Colorado, Minnesota, Pennsylvania, Massachusetts and Singapore. Its principal manufacturing facilities are located in China, Malaysia, Northern Ireland, Singapore and Thailand, and, in the US, in California and Minnesota.

The company did not immediately respond to a request for a current breakdown of their real estate portfolio. The last time Seagate detailed its portfolio in an SEC filing was 2003. At that time, it said it owned and leased 2.8 million square feet in the US, including 745,000 square feet in California, with the longest leases running through 2027. Its largest US presence was in Minnesota, where it occupied 1.2 million square feet.

The company says it has shaved labor costs by 25% since the start of the year. It will take a $72-million pre-tax restricting charge in its June 2009 quarter consisting mainly of cash based employee termination costs, which are expected to be substantially paid in the September 2009 quarter.

Seagate hopes to save $125 million a year from the layoffs and be cash flow and earnings positive in its 2010 fiscal year. To make it happen, additional operating savings will be sought in product development, marketing/administrative and manufacturing areas. Consequently, the company expects to incur restructuring charges in the June quarter of an undetermined amount.

Seagate leases approximately 110,000 square feet in Milpitas. Last summer, it expanded a leasehold at 3101 and 3121 Jay Street to 35,673 square feet that runs into 2012. It also leases a 77,200-square foot R&D building with a 66,000 square-foot clean room on Milpitas Boulevard on a five-year lease that runs into 2012 but last fall vacated the space in favor of overseas manufacturing.

The Jay Street buildings are owned by Westcore Properties. A family trust owns the R&D building.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.