Seagate computer firm in Derry braced for pay cuts and job losses

THE 1,400 employees at the Seagate computer disc drive manufacturing plant in Derry are bracing themselves for significant job losses in the coming weeks following a company announcement yesterday that an immediate and indefinite 10 per cent pay cut is to impact on one-third of the Derry workforce.

Five people are also to be made redundant and senior management at the plant will be taking pay cuts of between 15 and 25 per cent.

However, the plant’s manager and Seagate vice-president John Spangler said he was not able to rule out further actions to reduce the company’s overheads within the next four weeks.

“I really do have to warn people that we have an over supply in the marketplace and although we are saying only a few people are affected today, in terms of job losses I expect some other actions will have to be taken and announced within a month, so this is probably not the end.

“I think those actions will affect this plant. The schedules in our business have declined at a rate that is very worrying and this probably is not the end of the story. It could mean more job losses here and it could trigger a 90-day consultation period,” he said.

“Today’s actions are for an indefinite period and indefinite is what it means unless the business conditions improve. We have to get our structures sorted out and that means lowering our cost structure to align with the current business environment which we all know is not good.

“It is possible there may have to be additional announcements in the coming weeks which could be about job losses or more pay reduction. All 10 of our worldwide business units are reviewing their operations. Our global workforce will be reduced by about 3,000 or by 6 per cent and we have to take these steps to save about $210 million annually and we in Derry are not immune to what is happening,” he said.

Meanwhile, Foyle MP and SDLP leader Mark Durkan said Seagate’s announcement confirmed the impact of the global recession in Derry.

“The Derry operations have come out relatively unaffected in relation to job losses but it will be very difficult for people to take a 10 per cent pay cut but that has to be preferable to the alternative. Firms are having to make choices today which were not in their business plans just a few months ago and we all have to make sure that Seagate in Derry is in the best condition to maintain as much of its skill base at it can,” he said.