Hitachi wields axe in storage unit

Hitachi Global Storage Technologies (GST) is slashing over 10% of its staff to combat fierce rivalry in the disk drive market, the firm said last week.

Hitachi GST, a division of Hitachi, will shut its manufacturing facility in Guadalajara, Mexico by the middle of next year and move production to an existing plant in Laguna, the Philippines. The closure will result in a reduction of around 11% of its 40,000-strong workforce.

The move is part of a larger restructuring effort by the vendor - which entails centralising manufacturing operations in South East Asia - through which it hopes to achieve savings of around US$300million over the next five years.

"This strategic manufacturing plan will not only improve Hitachi's competitiveness, but will also benefit our customers," said Hiroaki Nakanishi, Hitachi GST CEO.

The decision to restructure follows disappointing financial results last month for the GST division.

Although no exact figures were given, Hitachi said at the time "losses widened in HDD (hard disk drive) operations". The difficulties have been put down to strong competition in the market, made worse by the merger of hard drive giants Seagate and Maxtor last year.

In addition to pulling out of Mexico, GST is also increasing its existing manufacturing operation in Shenzhen, China, and scaling back manufacturing operations in Odawara, Japan.