Computer Memories, Tandon Fire Total of 300 in Austerity Move
Tandon and Computer Memories, a pair of Chatsworth-based disk drive manufacturers that are on cost-cutting campaigns, announced firings Friday that put nearly 300 local employees out of work.
The dismissals were the second major round of job cutbacks for both of the troubled companies this year.
Computer Memories, which will lose its contract with computer-industry giant IBM at year-end, fired 160 workers, most of them in Chatsworth.
Gary Streuter, Computer Memories’ president and chief operating officer, said more dismissals will follow if the company fails to replace its IBM business “in the next couple of months.”
Singapore Plant Unaffected
The cutbacks will leave Computer Memories with a work force of about 230 at its Chatsworth headquarters and disk drive plant and about 50 at other U.S. facilities. Streuter said the company’s plant in Singapore, which employs about 850 workers, was not affected by the dismissals.
Streuter said the Chatsworth plant, however, may have another “small reduction” in employment as a result of the company’s continuing shift of production from its local plant to Singapore. In July, the company dismissed 177 workers in Chatsworth, largely because of a shift of production to Singapore.
Computer Memories, a 6-year-old company that grew rapidly over the last two years on the strength of its orders from IBM, announced Aug. 12 that IBM would not renew its contract. IBM’s orders accounted for 81% of Computer Memories’ sales in the quarter ended June 30, when it reported revenue of $50.5 million.
Tandon, which has lost money for four consecutive quarters, said it fired 131 workers at its Chatsworth and Simi Valley plants. The company said the workers no longer were needed because of its decision to consolidate operations by moving manufacturing and engineering operations from Chatsworth to the Simi Valley plant. Only its headquarters will remain in Chatsworth.
1,000 Remain at Tandon
Michael Sanders, a Tandon spokesman, said the cutbacks leave the company with about 1,000 U.S. employees. In addition to the Chatsworth and Simi Valley plants, Tandon has manufacturing facilities in Thousand Oaks, San Jose and Santa Clara.
In May, Tandon dismissed 370 workers in Southern California as part of its consolidation drive. Last year, it fired 1,000 workers in the area as it stepped up production overseas.
The company, which reported a loss of $15 million on sales of $62.3 million in its third quarter ended June 28, has been hurt by the downturn in the computer industry and by heavy competition in the disk drive business.
Tandon’s and Computer Memories’ products, disk drives, are devices with magnetic heads that are used to store and retrieve information for computers.
