Maxtor to lay off 700 S'pore staff
The world's biggest disk-drive maker will carry out the retrenchment exercise over the next two weeks
By Denesh
Divyanathan and William Choong
TECHNOLOGY REPORTER
IN ANOTHER blow to Singapore's weakening disk-drive industry, US giant Maxtor Corporation is retrenching 700 staff over the next two weeks in what is believed to be the biggest mass layoff this year.
|
|
|
Maxtor's production staff were put on a four-day work week recently, a source says, adding that administrative staff have also been asked to take two days' annual leave a month. -- JAMES HODSON |
The job losses represent 10 per cent of Maxtor's workforce in Singapore, where it has manufacturing plants in Yishun and Ang Mo Kio.
About half of the 700 are contract workers, industry sources said. A small number of administrative staff will also be involved.
The move by Maxtor - which is the world's largest maker of disk drives - comes as lower-cost countries woo manufacturers of such products away from Singapore, and amid a global slump in personal computers sales.
Just three months ago, about 100 Singapore jobs were lost when homegrown soundcard maker Creative Technology axed 550 workers worldwide, and this month consumer electronics giant Aiwa said it would shed 249 jobs in Singapore.
The overall manufacturing sector accounted for a hefty 62 per cent of the 3,248 job cuts in Singapore in the first quarter.
The Straits Times understands that Maxtor will make an announcement today.
Maxtor officials in Singapore and its corporate headquarters in California could not be reached for comment - despite numerous phone and e-mail messages being left at their offices over the last few days.
But the writing has been on the wall. Maxtor's production staff were put on a four-day work week recently, a source close to the company said.
Administrative staff have also been asked to take two days of annual leave a month, she added.
The cutbacks come despite assurances made when Maxtor announced a US$1.1 billion (S$2 billion) merger with rival Quantum last October that the tie-up would have little effect on its workforce in Singapore.
Maxtor president and chief executive Michael Cannon said then: 'I don't expect there will be a significant impact on the manufacturing workforce here.'
The merger had been expected to generate cost- savings of between US$120 million and US$200 million within 24 months of its closure. The savings were to come from a reduction in staff commitments, and from increased efficiency and productivity, it said.
According to previous reports, the group has a staff count of 10,500 people worldwide, of whom 7,000 are based in Singapore.
In April, Maxtor said it had retrenched 41 staff from its Asian operations - including 21 from its regional headquarters here. Another 530 staff were laid off in an earlier exercise.
Mr Cannon was quoted to have said then that Maxtor would continue to pour 'steady investments' into its Singapore operations.
'This will be done in the form of capital expenditure, where we seek to update our capacity.'
A source said yesterday that worsening market conditions in the industry led to Maxtor's latest round of retrenchments.
The sustained downturn in the disk-drive market worldwide 'caught them by surprise', she added.
In April, Singapore's disk-drive exports plunged to $848 million - the lowest since the mid-1990s.
Then, market-watchers said the fall reflected a production shift to cheaper locations such as China and Malaysia.
The languishing sector now makes up about one-fifth of Singapore's electronics output, a significant drop from 28 per cent in 1999.