Quantum to cut up to 800 jobs, take $50m charge
Published: 20 Aug 1999 09:48 BST
Quantum's hard disk drive group said Thursday it will cut as many as 800 jobs and take a $50m (£31m) charge in its second quarter in an effort to streamline its production of drives for low-cost PCs.
Company officials said it was making the moves to align its technology and business more closely to the rapidly growing market for personal computers costing less than $700.
Quantum said it will take the charge in the current fiscal second quarter ending 26 September. Quantum shares fell 9/16 to 20 1/8 ahead of the announcement.
Quantum executives blamed "destructive pricing pressures" by other disk drive makers to gain market share. John Gannon, president of the hard disk drive group, told analysts on a conference call that "no one is making any money in the disk drive business today".
Last quarter, Quantum missed analysts' estimates by 5 cents a share, earning $8.3m, or 5 cents a share, on sales of $1.1bn. Quantum said its high-end disk drive business will be "largely unaffected" by Thursday's announcement.
Twelve of the 17 analysts following the stock maintain either a "buy" or "strong buy" recommendation.
Reuters contributed to this report.
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