Hutchinson Technology Inc. announced another round of layoffs as part of its long-range plan to reduce expenses.
The maker of disk-drive components based in Hutchinson, Minn., said Wednesday it will cut its U.S. workforce by about 100 jobs by the end of July, with about 60 of those at its operations in Eau Claire, Wis. Along with its headquarters, Hutchinson also has a facility in Plymouth.
Hutchinson Technology has been struggling as a result of a downturn in its business that began in 2007, when it lost market share in the slowing desktop computer market, and intensified in late 2008 as the global economic crisis hit. Its problems were made more difficult in 2011 by floods in Thailand that closed a large portion of its manufacturing space there.
Hutchinson has laid off nearly 60 percent of the 5,433 employees it had in 2006 and now employs about 2,500.
And the company hasn't reported an annual profit since 2007. It has had cumulative losses of $485 million since then. The company lost $35.1 million last year on revenue of $249.6 million. Hutchinson's stock closed Wednesday at $2.12 a share, down 3 cents, or 1.4 percent.
The company said in a statement Wednesday that it expects severance costs from the current round of layoffs to total about $1.3 million in its third quarter.
"As we've progressed through our consolidation effort, additional opportunities to improve our efficiencies and reduce our costs have been identified," CEO Rick Penn said in a statement.
The company previously announced that it was expecting savings of $2.5 million per quarter through consolidation of its operations and the shift of more assembly production and jobs to its Thailand plant. Combining those savings with the newly announced layoffs, Hutchinson Technology now estimates cost reductions of roughly $4 million per quarter can be achieved by the end of fiscal 2014.
"We expect our participation on customers' new disk drive programs to position us for demand growth in the second half of the calendar year," Penn said. "Our financial performance will improve as demand increases and we realize the benefits of our lower cost structure."
Steve Alexander • 612-673-4553
