Seagate targets 6% of workforce for early retirement

"This is a global policy. All of the [Seagate] plants across the world will need to trim the workforce by 6 per cent," said an officer at the country's biggest hard-disk-drive manufacturer.

"Orders have dropped off somewhat, but not significantly."

The local unit of the US-based firm operates two plants - one each in Samut Prakan and Nakhon Ratchasima provinces - for a combined staff of 13,000. Six per cent would be 780 employees.

In a January 14 statement, Seagate in the US said it would reduce its global workforce by about 2,950 employees, inclusive of a previously disclosed reduction in the company's US workforce. Employees terminated from Seagate will be offered a severance package consistent with company policy.

Seagate has reduced salaries for a portion of its workforce, with executive vice presidents and above taking a reduction of 25 per cent, senior vice presidents 20 per cent, vice presidents 15 per cent and management, sales, supervisors and professional staff 10 per cent. These actions are expected to save about US$210 million (Bt7.34 billion) annually, and Seagate is also making other reductions in operating costs.

A human-resources official at the Nakhon Ratchasima plant, which employs more than 7,000, said early retirement would be offered until Saturday and was expected to draw applications from 600 workers. The company has promised to pay full compensation, in accordance with both the Labour Act and company policy.

The official said if the number of applicants did not reach the target by Saturday, the company would select those to be laid off.

One worker at the plant said more than 100 staff had already applied for early retirement, particularly those who had worked for the company for more than 20 years, due to the huge amount of compensation involved. She said she knew of one employee alone who would receive Bt800,000, enough to start a business.

"Many are undecided, though. After working here for 15 years, I don't want to leave either, because nowadays it's difficult to find a job," she said.

Since last October, six factories in Nakhon Ratchasima have laid off staff or shut down completely, affecting 3,000 workers. Before that, the number of unemployed in the province was 20,000.

This year's national unemployment rate could reach 1 million, up from 450,000 last year, due to the global financial crisis that has led consumers the world over to tighten their belts.