Micropolis Shifts Some Production to Singapore : Disk-Drive Producer Lays Off 180
Micropolis Corp., a disk-drive maker whose profits have surged since late last year despite the computer industry’s slump, said Wednesday that it dismissed 180 temporary workers in Chatsworth and will lay off more local employees by year-end.
Dundas I. Flaherty, Micropolis’ senior vice president for finance, said the cutback was the first significant layoff ever for the booming 9-year-old company. He said it stemmed from the transfer of some manufacturing from Chatsworth, where Micropolis is headquartered, to a Singapore plant that the company acquired in January.
The dismissals reduced Micropolis’ employment roster to 1,300, including more than 900 workers in Chatsworth and 300 in Singapore. It also has sales personnel scattered throughout the United States and Europe. As recently as March, 1985, the company’s payroll numbered 611.
Large Part of Market
Micropolis has prospered over the last year by capturing a dominant chunk of the comparatively healthy market for high-speed, high-capacity disk drives, which store and retrieve information for computers. The company’s equipment is used with computers designed for engineers and in so-called multiuser systems on which, typically, five to eight people can work simultaneously.
The company’s rapid sales growth, Flaherty said, prompted it this year to discard the practice of producing all of its products domestically in favor of cutting costs by manufacturing older-model equipment in Singapore. He said plans to transfer overseas all of the company’s production of 85-megabyte disk drives, which store up to 85 million units of computer information, will spur further personnel changes.
Flaherty predicted that Micropolis will add another 300 or 400 workers in Singapore by the end of the year. He was less specific about plans for Chatsworth but suggested that at least 50 to 100 positions will be cut through “normal attrition” and that the 100 temporary employees still with the company also will be dismissed.
Unaffected by Slowdown
Flaherty said Micropolis’ cutbacks were not prompted by a business slowdown, but that computer makers “are not ordering as far ahead as they used to, and that makes everyone more cautious.”
Industry experts said the company appears to be continuing to do well, although its growth appears to have slowed recently.
“I don’t think there’s an underlying Achilles’ heel,” said James N. Porter, publisher of Disk/Trend in Los Altos, Calif. “Like many electronics firms, they’ve hired temporary employees to give them the flexibility to cut back when they want to.”
In the company’s second fiscal quarter, which ended June 27, profit rose more than ninefold from the same period last year, to $4.4 million. Sales jumped 169%, to $55.3 million.
