Seagate Technology (NYSE: STX) has told CEO William Watkins to hit the road, and has brought in Chairman and former CEO Stephen Luczo to replace him. Watkins, one of the funniest and most candid CEOs on the planet, has been the operational wizard behind Seagate's manufacturing turnaround in the last five years while he also cut Seagate's global workforce by half as the company became leaner and more aggressive. It also swallowed competitor Maxtor a few years ago, but has never been able to squash competitor Western Digital Corp. (NYSE: WDC), which continues to eat its lunch at every opportunity.Still, Seagate's quarterly results on January 21st may show that the world's largest disk drive maker has fallen hard on the back of consumer spending slowdowns and reduced orders from its largest OEM and distribution partners. Seagate President and COO David Wickersham also abruptly resigned yesterday, which makes us all wonder just what kind of internal turmoil there was at the top of Seagate's management ranks.
Luczo, the banker who took Seagate private in 2000 with a group of investors only to take it public again a few years later with a fat check in his pocket, isn't a technologist. He's not an operational guy, nor a manufacturing guy. He is a finance guy who will no doubt have to turn Seagate's fortunes around once again to prop up its flagging stock price, which has plummeted from over $28 just over year ago to less than $5 today.
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Reader Comments (Page 1 of 1)
1-13-2009 @ 1:55PM
KG said...
This not surprising. Seagate has always had a history of operating in a flux-mode for years. It was public 15 years ago and then went private; subsequently, went public again. Nevertheless, they are the largest supplier of HD's in the world with gigantic operations in Thailand and Malaysia. The company will unnerve investors from time to time; it is the nature of their business. A very dynamic company and not one to invest in for the faint-hearted.