Quantum Corp. will lay off close to one-third of its workforce and consolidate parts of its business in an effort to offset falling revenues caused by declining hardware sales, the company announced on Monday.
Quantum will cut 1,100 positions as it embarks on a restructuring effort expected to continue over the next two quarters, the company said in a statement. The maker of tape drives and storage systems currently employs close to 3,000 people and has been hit hard by a slowdown in hardware spending.
The first phase of Quantum's reorganization will affect the DLTtape Group and Storage Solutions Group. The company plans to outsource much of the manufacturing from those divisions to Jabil Circuit Inc., as announced last week. Quantum also plans to outsource manufacturing of its P-Series tape libraries. Eighty percent of the job reductions come as a result of the deal with Jabil, Quantum said in the statement.
The second phase of the reorganization includes cutting back on development teams and site locations to help align the company's operations with lower revenue levels.
Quantum hopes the moves will allow it to cut its pro forma operating expenses by close to 20 percent by the end of its fiscal year in March 2003, excluding amortization of goodwill and restructuring expenses. Charges for the restructuring, to be applied during the second and third quarters of its current fiscal year, are expected to reach US$100 million, Quantum said in the statement.
Quantum last month tapped former Microsoft Corp. executive Rick Belluzzo as its chief executive officer to help turn the company around.