Seagate To Halve Maxtor Staff3:13 PM EST Fri. May. 26, 2006
While the closing of Seagate Technology’s acquisition of rival hard-drive vendor Maxtor will result in a huge layoff of Maxtor personnel, many solution providers say the finished deal may not have a major impact on the channel.
Seagate executives said last week the Scotts Valley, Calif., company plans to close all Maxtor hard-drive production with the exception of its 3.5-inch, 10,000-rpm Serial Attached SCSI drives and 500-Gbyte ATA hard drives.
Seagate intends to keep Maxtor’s line of branded products, including its external hard drives, and the Maxtor brand name.
Seagate also expects to lay off about 50 percent of Maxtor’s workforce of between 12,500 and 13,500. About 90 percent of those to be retained will be in Asia, which will leave roughly 750 Maxtor employees in the United States and Europe. Maxtor has 2,400 employees in the United States, a spokesperson said.
Brian Dexheimer, executive vice president of global sales and marketing at Seagate, said Seagate plans to retain much of Maxtor’s service, channel and branded-products team.
“We intend to support Maxtor’s existing channel partner network,” he said.
A Seagate spokesperson said details will be disclosed next month.
However, Dexheimer did send a letter to channel partners confirming his company’s commitment to building on the strengths of both companies to enhance Seagate’s channels. “It is our firm belief that achieving this goal enables us to better meet your needs now, and into the future,” he wrote.
System builders told CRN that Seagate is a much bigger player than Maxtor in their markets.
Todd Swank, director of marketing at Northern Computer Technologies, Burnsville, Minn., said the acquisition has little to do with Maxtor’s products and more to do with its production capacity.
“[Seagate] looked at Maxtor, saw they had the capacity and were screwing up prices, so they bought them,” he said.
Brian Lisse, owner of Madison Computer Works, Madison, Wis., said adding a label reading “Made by Maxtor, a division of Seagate” would make the Maxtor brand more attractive to customers.