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Seagate To Close Northern Ireland Plant

Effort by the world's largest hard drive maker to streamline operations will affect 780 workers — 1.5 percent of the company's global work force.

SAN JOSE, Calif. (AP) — Seagate Technology, the world's largest maker of hard drives, said Monday it is shuttering one of two manufacturing facilities in Northern Ireland, resulting in a cut of 780 employees, about 1.5 percent of the company's global work force.
When the company closes a 10-year-old plant in Limavady in County Londonderry that manufactures substrate materials used in disks for hard drives, 160 temporary workers also will be affected, Seagate spokesman Woody Monroy said.
Monroy did not know how much money the company would save from the move, which is expected in the second half of next year, but he said it is part of Seagate's ongoing effort to streamline operations.
A larger plant in the city of Londonderry will not be affected. That location has 1,400 employees and manufactures the recording-head components for hard drives.
Seagate expanded substrate manufacturing at its facilities in Singapore and Malaysia last year while external suppliers have lowered their costs, Monroy said.
William O'Kane, manager of the Limavady factory, broke the news to workers in a tent set up beside the Limavady plant. Employees, among them spouses working together at the plant, left the meeting in tears.
''We have made great efforts over the past few years to maintain the competitiveness of the Limavady facility, but recent increases in global substrate industry capacity together with our competitors' lower labor costs have made the Limavady operation uncompetitive,'' O'Kane said.
Foreign exchange movement and shipping and utilities costs also contributed to the decision to close the plant, company officials said.
Strong demand for hard drives — in products ranging from computers to digital video recorders — has contributed to Seagate's income growth this year. But its profit is tempered by competitive pricing.
For its last fiscal quarter, which ended Sept. 28, Seagate's earnings grew to $355 million, or 64 cents per share, more than 18 times the year-ago period's earnings of $19 million, or 3 cents per share.
For the current quarter, Seagate forecast a profit of 57 cents to 61 cents per share on revenue of $3.15 billion to $3.25 billion.
Shares of Seagate rose 35 cents, or 1.3 percent, to close at $27.30 Monday.
The company is based in the Cayman Islands but operates out of Scotts Valley, near Santa Cruz.
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