Hard Drive Maker Maxtor Cuts 900 Jobs
Soon-to-be-acquired Maxtor warned Wall Street that it will miss its first-quarter financial targets by a lot more than the proverbial mile and said it will cut 900 jobs in Singapore. The ugly meltdown, which includes a per-share loss that’s more than double analysts’ estimates, is the result of slow sales and customer defections brought on by the company’s pending acquisition by Seagate Technology, Maxtor said in a statement released after Tuesday’s close.
The hard-drive maker now expects a first-quarter loss of $100 million to $104 million, or 39 cents to 40 cents a share, compared with the First Call consensus of a loss of 18 cents. Sales will likely range from $875 million to $885 million, as much as 10% under Wall Street’s target of $964.6 million. The two factors strained Maxtor’s “already burdened cost structure and constrained Maxtor’s ability to compete, especially on the low-end of the desktop drive market,” the company said. Maxtor will cut some 900 jobs in its Singapore manufacturing facility and will take a $6 million reserve in the first quarter to pay for severance-related expenses.
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