For Hutchinson Technology and the town that is its namesake, the deepening global recession has gone from bad to worse.
The disk drive parts maker said Monday it is shedding 1,380 workers, or 30 percent of its workforce. Just a month ago, Hutchinson said it expected cuts of 20 to 25 percent, or 1,100.
News of the additional layoffs at Hutchinson Technology came on the same day that Seagate Technology, the California-based disk drive manufacturer and a major Hutchinson customer, announced plans to cut its U.S. workforce by 10 percent, or about 800 jobs. Seagate employs about 3,300 in Bloomington and Shakopee.
About 1,000 of the affected Hutchinson Technology workers are in Minnesota. Many received the bad news Monday morning, officials said, noting that the rest will be notified throughout the week. The workforce reduction is higher due to the "lower demand outlook for 2009 and continued market and economic uncertainty," said spokeswoman Connie Paultz in an e-mail to the Star Tribune.
More manufacturers are swinging the employment ax as the recession's grip tightens. Manufacturers scrubbed 600,000 jobs and shut dozens of plants last year. In Minnesota, 3M, Andersen, Select Comfort, Pentair, Imation and others cut 8,500 jobs in just 10 weeks.
Meanwhile, more job cuts are coming as retailers Best Buy, Linens and Things and now Cost Plus World Market shut stores and/or trim corporate staff.
The Hutchinson plant will lose 950 employees in all, and the Plymouth facility will lose about 50 workers, Paultz said. Before the cuts, the manufacturer had 2,515 Minnesota workers, including 2,300 in Hutchinson and 215 in Plymouth.
"The staff reductions in Hutchinson were impacted, in part, by a decision to consolidate some of our component manufacturing into our Eau Claire plant,'' Paultz said. "Consolidation allows us to run more efficiently at lower levels of production. We also reduced our development center and corporate staffing levels."
The company also will shed 275 workers in Sioux Falls, S.D., and 100 in Eau Claire, Wis.
As recession-weary consumers slashed spending, PC sales fell, affecting Hutchinson Technology, which makes the suspension device that holds a computer chip above a spinning hard disk. Sinking PC sales have hurt Dell, Compaq, Hewlett Packard, Seagate and Hutchinson.
"Over the last month, the suspension assembly demand outlook for fiscal year 2009 has weakened significantly," CEO Wayne Fortun said in a December statement. Shipments in the company's first quarter, which ended Dec. 28, probably fell 20 percent from the previous quarter, he said.
The company, which has seen its stock plummet from a high of $24 last year to just $3.80 a share Monday, lost $105 million in the fiscal fourth quarter. Officials expect more bad news this quarter.
The National Association of Manufacturers says the pain won't stop until the credit crunch eases, the housing market recovers and consumers step up purchasing.
Last week the Bayport window and door company, Andersen Corp., launched its fifth round of layoffs, letting go 50 corporate and management jobs permanently and furloughing 400 plant workers for the first quarter of 2009.
In recent weeks, 3M slashed 2,300 jobs globally. Pump and filter maker Pentair cut 1,600. Manufacturers Graco, Tenant, Imation, and ammunitions maker Alliant Techsystems chimed in with 600 combined staff cuts.
Dee DePass • 612-673-7725