Seagate Wage Cut Follows Investment

Despite a major investment last summer, all the employees at a local high-tech manufacturing facility are now facing a wage cut. The workers, at Seagate Technologies in Londonderry, have been asked to take a 10% cut in their wages for at least the next six months.

The move comes on foot of an earlier move to get around 300 workers at the plant in Springtown to accept a drop in salary.

This latest move will see all staff now having their hours of work cut - each by the same amount - while everyone will also earn less in order to achieve a substantial reduction in the salaries bill at the international company.

The cuts in Seagate's Derry plant follows the previous closure of the nearby factory in Limavady, late in 2007, and the loss of hundreds of jobs and is an attempt by the company to face up to a global drop in demand for hard disc drives, following the worldwide recession.

The company has said both measures will be reviewed at the end of June.

Things have changed rapidly in the technology market as just last July, Seagate announced a £120m investment in its Springtown plant in Londonderry.

At the time, this was seen as good news that was doubly welcome after the previous year's announcement by the US firm that Seagate in Limavady had to close, with production being moved abroad.

In November 2007, Seagate's Limavady plant lost 900 jobs in favour of a Seagate facility in the Far East.

That negative development was followed by the more positive one, and last summer a fresh investment went into new equipment, IT, research and development and infrastructure, which Seagate had flagged as a "confirmation of Seagate's position as the world's largest manufacturer of hard disc drives".

Yet, just seven months later - as demand drops - the multi-national is facing real problems and has to cut back on costs to keep the business buoyant.

Things have changed very much since July when a spokesman insisted that the investment would allow the Springtown factory to "remain at the forefront of technology".

At the time he said: "It is already one of the leading producers of read-write heads in the world and is the primary supplier of heads for Seagate. This is a position that will be enhanced by this new investment.

"The success of this factory since it started production in 1994 and the continued success we see for it into the future are evidence of Northern Ireland's capacity to compete in the global marketplace."

See: Seagate Boosts Derry - Months After Limavady Closure

(BMcC/JM)