Disk Drive Maker Micropolis Closes; 2,400 Lose Their Jobs

After continued losses in a break-neck market, computer hard drive manufacturer Micropolis Corp. has gone out of business, laying off more than 2,400 workers worldwide, including 300 at its headquarters in Chatsworth.

Micropolis’ parent, government-owned Singapore Technologies, has hired Price Waterhouse to oversee the firm’s liquidation.

“The company has ceased operations,” said Freddy Reiss of Price Waterhouse. “Singapore Technologies decided to exit the disk drive industry completely. It’s too competitive an industry.”

Micropolis, founded in 1976, designed and tested software in Chatsworth and manufactured the hard drives in Asia.

In addition to local job loss, 1,300 workers in Singapore, 700 employees in Thailand, as well as marketing and sales staff throughout Europe were terminated.

Rumors of layoffs at the Chatsworth plant had circulated for weeks, according to a 12-year employee who asked not to be identified. “There was a meeting three days before to say the rumors were not true,” he said. “They told us they had the backup of the government of Singapore.

“But Monday morning, they called us into a meeting, read a press release and told us to go home.”

Micropolis faced tough rivals such as IBM Corp., which has stepped up its production in the high-end segment and has shown its willingness to match price cuts by competitors.

Singapore Technologies, which acquired Micropolis in 1996 for $55 million plus assumed debt, said the unit’s revenue for the first three quarters of 1997 totaled $140 million, far below the target of $405 million.

The company said profit was insufficient to cover overhead and that the outlook for 1998 was not expected to improve, because of the intense competition.

*

Bloomberg News was used in compiling this report.