Archive Corp. to Trim 108 Cipher Jobs in San Diego
Archive Corp., the data storage products maker that merged in April with rival Cipher Data Products Inc., said Monday it will lay off 108 employees in San Diego and reorganize itself into six new business units.
The layoffs, which will only affect employees at Cipher’s headquarters in San Diego, represent a 3% reduction in Archive’s 3,300-employee work force. Before the merger, Archive had about 1,600 employees and Cipher had 1,700.
Archive, based in Costa Mesa, said the job cuts are the result of a reduced demand for Cipher’s products, a need to eliminate duplication after the two firms’ corporate staffs were merged and a transfer of some manufacturing to Singapore.
After a three-month hostile takeover battle, Cipher Data finally agreed in April to be acquired by Archive for $123 million. Several top Cipher executives, including Chairman Gary Liebl, resigned from the company in late April.
Under the realignment, manufacturing will be consolidated at two plants in Singapore and corporate finance and administration will be combined in Costa Mesa. Employees in Costa Mesa will not be affected by the layoffs, said B.J. Rone, chief financial officer.
“This is the new Archive, the final plan for our merged company,” Rone said. “We haven’t made any decisions about one division, (Cipher’s Optimem), but this is the only reorganization and only layoffs we expect.”
Allen Strand, an analyst with Bateman Eichler, Hill Richards in Los Angeles, said the layoff was expected and that further consolidations may follow.
Archive and Cipher both make tape drives that serve as backup storage systems to prevent the loss of data stored in computer hard disk drives in the event of system crashes or natural disasters.
The merged company will realign itself into six units distinguished by separate technologies and markets. The changes in the company operations are as follows:
* Archive’s original equipment manufacturing products division will make 5 1/4-inch tape drives under both the Archive and Cipher brands. Cipher’s San Diego unit will shift its manufacturing overseas and some employees will be transferred to Archive’s plant in Costa Mesa.
* Cipher in San Diego will focus exclusively on its original core business of making half-inch tape drives for minicomputers. Craig Turner, a longtime Cipher employee, will serve as the division’s president.
* Cipher’s Irwin Magnetic Systems, based in Ann Arbor, Mich., will concentrate on the design and marketing of quarter-inch mini-cartridges and 3 1/2-inch form factor tape drives and tape backup subsystems. Ed Carlson will be president of Irwin. Herb Amster, a founder of Irwin, will move to the Archive corporate staff as senior vice president of corporate development.
* The tape drive manufacturing operations of both Archive and Cipher will be consolidated in Singapore under the supervision of Jess Parker, senior vice president of operations for Archive.
