Disk drive giant Seagate has offered voluntary retrenchment to 6000 employees at its Penang and Ipoh plants in Malaysia.
This exercise, which is meant only for Seagate's Malaysian operations, will see its Ipoh plant ceasing operation early next year, leaving the Penang plant as its only Malaysian site for recording heads.
The consolidation exercise is expected to be completed by February 2001.
Seagate has a total of 11,000 workers in Peninsular Malaysia. It has other plants in Seberang Prai and Senai. Penang Seagate Industries senior corporate communications manager, Audrey Cheah, said the company will assist affected employees with job relocation and placement schemes.
In September 1999, Seagate retrenched about 1600 employees from its Singapore plant as part of its global cost-cutting measures. Cheah, however, said that the Malaysia consolidation exercise has nothing to do with cost-cutting. Technological improvements have allowed Seagate to produce its required number of heads with fewer facilities, Cheah said.
Seagate recently reported revenue of US$1.748 billion, pro forma net income of US$62 million and pro forma diluted net income per share of US$0.26 for its quarter, which ended September 29, 2000.
