Seagate Restructures to Further Reduce Operating Costs



    SCOTTS VALLEY, Calif., May 13 /CNW/ -- Seagate Technology (Nasdaq:   STX)
today announced it has initiated a restructuring plan that includes a
reduction of approximately 1,100 employees or 2.5% of the company's global
workforce. This reduction is required to support a targeted run rate of
product development and marketing and administrative costs of less than $300
million per quarter and to position the company to be cash flow and earnings
positive within its fiscal year 2010.

    The restructuring plan, which the company expects to be largely complete
by the end of July 2009, is expected to result in total pretax restructuring
charges of approximately $72 million. These charges will primarily be incurred
in the June 2009 quarter and consist mainly of cash based employee termination
costs which are expected to be substantially paid in the September 2009
quarter. The annual savings generated from this restructuring action is
expected to be approximately $125 million.

    Since the beginning of fiscal year 2009, and including today's
announcement, the company has reduced its global headcount through attrition
and restructuring, resulting in a reduction in the company's labor costs in
excess of 25%. In addition, Seagate previously announced the realignment of
its organizational structure to increase efficiency, as well as the closures
of two recording media facilities and its Pittsburgh research facility,
company-wide salary reductions announced in January 2009, and other cost
reduction initiatives. Seagate continues to assess options to further reduce
manufacturing operating costs.
    

    About Seagate
    
    Seagate is the worldwide leader in hard disk drives and storage
solutions. Learn more at http://www.seagate.com
    


    Cautionary Note Regarding Forward-Looking Statements
    
    This press release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. These forward-looking
statements include, but are not limited to, statements related to the
company's future operating and financial performance, current expectations
regarding its restructuring plans and the associated projected cost savings,
customer demand for its products and general market conditions. These
forward-looking statements are based on information available to Seagate as of
the date of this press release. Current expectations, forecasts and
assumptions involve a number of risks, uncertainties and other factors that
could cause actual results to differ materially from those anticipated by
these forward-looking statements. Such risks, uncertainties and other factors
may be beyond the company's control. In particular, uncertainty in global
economic conditions pose a risk to the overall economy as consumers and
businesses may defer purchases in response to tighter credit and negative
financial news.  Such risks and uncertainties also include the company's
ability to achieve projected cost savings in connection with its restructuring
plans; the company's ability to reduce other expenses to achieve targeted
product development and marketing and administrative costs; the impact of the
variable demand and the aggressive pricing environment for disk drives,
particularly in view of current business and economic conditions; dependence
on Seagate's ability to successfully qualify, manufacture and sell its disk
drive products in increasing volumes on a cost-effective basis and with
acceptable quality, particularly the new disk drive products with lower cost
structures; and the impact of competitive product announcements and possible
excess industry supply with respect to particular disk drive products.
Information concerning risk, uncertainties and other factors that could cause
events to differ materially from those described in the forward-looking
statements is contained in the company's Annual Report on Form 10-K as filed
with the U.S. Securities and Exchange Commission ("SEC") on August 13, 2008
and in the company's Quarterly Report on Form 10-Q as filed with the SEC on
May 6, 2009, which statements are incorporated into this press release by
reference. These forward-looking statements should not be relied upon as
representing the company's views as of any subsequent date and Seagate
undertakes no obligation to update forward-looking statements to reflect
events or circumstances after the date they were made.
    







    




For further information:

For further information: media, Brian Ziel, +1-831-439-5429,
brian.ziel@seagate.com, or investors, Rod Cooper, +1-831-439-2371,
rod.j.cooper@seagate.com, both of Seagate Technology Web Site:
http://www.seagate.com

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SEAGATE TECHNOLOGY

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