Sad Day For Seagate and Plantronics- Seagate CEO Ousted & 3,000 Jobs Cut – Plantronics Slashing Close to 1,000 People

What a sad week for Seagate.  CEO Bill Watkins (whom I like and have interviewed many times) was ousted and now they are cutting almost 3,000 jobs.  Folks we are seeing the beginning of the massive recession or depression.  Ok we are knee deep in the financial depression.  This is only going to get worse.

Seagate said in an 8-K filing with the SEC that the restructuring moves will result in pre-tax charges of about $90 million, with most of that to be taken in the December 2008 quarter. The company expects the stafff reductions to save $130 million a year.

The company also said it will cut the salaries of its senior staff, with a 25% cut for new CEO Stephen Luczo, “named executive officers” and executive vice presidents, a 20% cut for senior VPs, a 15% reduction for VPs and a 10% reduction for other management, sales, supervisors and professional employees. The savings cuts should save about $80 million annually.

In related cuts in Silicon Valley and Santa Cruz Plantronics is cutting almost 1,000 jobs.  Ken Kannapan (a neighbor of mine) is trying to keep the company cash flow positive.  Plantronics needs to move the “ball down the field” big time if they want to compete in Unified Communications.

Company officials said revenue and earnings per share for the third quarter of fiscal 2009 will be lower than originally expected. They had projected net revenues of $205 million to $220 million but now are expecting revenues to be $184 million for the third quarter. Final third-quarter earnings will be announced Jan. 27.

The revised revenue estimate is mostly the result of lower-than-expected sales of Bluetooth headsets, but also reflects the impact of broad economic weakness across different product categories, officials said.

As a result of the workforce reduction and other restructuring, officials expect savings of approximately $7.7 million to $8.2 million in the fourth quarter of fiscal 2009. Yearly savings are expected to be more than $50 million. The company also plans a 50 percent reduction in capital expenditures in fiscal 2010.

“As global economic weakness persists, our key objectives are to remain profitable and cash-flow positive, continue to invest in strategic initiatives such as unified communications, and to improve our profitability in our consumer businesses,” said President and Chief Executive Officer Ken Kannappan. “We believe that our strong financial position combined with ongoing strategic investments will allow us to emerge from this downturn in a significantly stronger competitive position.”

Tech Stocks STX: CEO Bill Watkins – He Gets No Respect

Bill Watkins has Seagate pumping but he gets no respect from Wall Street.  Cnet’s Charles Cooper has a very good interview and story with and about Bill Wakins, the CEO of Seagate.

I’ve been doing an earnings podcast with Bill for most of the last 6 qtrs and have watched how he’s managed to keep Seagate focused.  He’s navigated Seagate through price wars, product changes, big acquisitions, and now a sagging Dow.  He’s like Rodney Dangerfield of tech stocks – “he gets no respect”. 

Here are some of the earnings podcasts that I’ve done with Bill Watkins.  The best part of web 2.0 media is the historical record or archive.  Lets take a listen to Bill over the past two years.

Here is the CEO Bill Watkins – story since 2006.  On the record with me on his company and his performance.   With Seagate generating over $700 million in cash, over $500 million in free cash, no inventories, and double-digit growth, what will it take for Wall Street to wake up.  Bill keep on podcasting. 

Earnings Q1 2008 – Brian Dexheimer, Chief Sales and Marketing Officer sat in for Bill Watkins

Earnings FY 2007  & Q4 2007 – July 2007

Earnings Q3 2007 – April 2007

 Earnings Q2 2007 – January 2007

Earnings Q1 2007 – October 2006

Earnings FY 2006 – August 2006

June 2006 Bill Watkins