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Maxtor to slash 1,500 workers

Hard drive manufacturer Maxtor announced yesterday that it will lay off 1,500 workers--about 14 percent of its workforce. Its Singapore operations will bear the brunt of the company's cost-cutting move, with 700 immediate retrenchments.

SINGAPORE--Hard drive manufacturer Maxtor announced yesterday that it will lay off 1,500 workers--about 14 percent of its workforce. Its Singapore operations will bear the brunt of the company's cost-cutting move, with 700 immediate retrenchments.

Maxtor's remaining 700 to 800 job cuts will be conducted over the next six months in relation to the company's merger with hard drive maker Quantum, Reuters reported.

Last October, Milpitas, California-based Maxtor said it was buying Quantum's hard drive business, to form the biggest hard drive maker, worth approximately US$2 billion. The deal was completed in April.

Maxtor CEO Mike Cannon had told a press conference here in October that there would be no significant job cuts in its manufacturing operations in Singapore because of the merger. Instead, softening PC demand seems to be behind the layoffs on the island.

"With the outlook for continued weakness in the PC market and limited visibility for the remainder of this year," Cannon said in a statement, "we believe it is necessary to both accelerate the expense reduction opportunities available through our merger with Quantum and to balance our manufacturing workforce with expected levels of demand." He added that inventory levels and pricing had been affected by "weaker than expected demand for hard drives'', in the second quarter.

Maxtor had a headcount of 6,500 in Singapore in October, most of whom were manufacturing staff in its two plants in Ang Mo Kio and Yishun.

However, the retrenchments were not totally unexpected. The Straits Times cited sources close to the company as saying that local production staff were put on a four-day work week recently.