HUTCHINSON, Minn. - Hutchinson Technology Inc. announced Tuesday it is reducing its overall operating costs in order to achieve fiscal 2008 profitability at currently demand levels for its suspension assembly products.
The cost reductions include the elimination of 500 positions. Employees at the facilities in Hutchinson and Plymouth, Minn.; Eau Claire, Wis.; and Sioux Falls, S.D., will be affected.
The workforce reductions are expected to be completed by the end of June 2007.
Hutchinson expects to save $35 million on an annualized basis from the workforce reductions and cost-cutting measures. For its fiscal third quarter, the company will include a pre-tax charge of $5 million in its financial results for severance costs.
“As discussed in our second quarter results announcement, we continue to have excess capacity, and we expect to incur a loss in 2007,” said Wayne M. Fortun, president and CEO. “We are reducing our cost structure and aligning our staffing levels with demand to position the company to achieve profitability in 2008 and beyond.”
“We remain encouraged by the long-term growth opportunities in both our Disk Drive Components and BioMeasurement Divisions,” Fortun continued. “By reducing our cost structure, we will be more competitively positioned to take advantage of these future opportunities.”