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Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
4. Restructuring and Exit Costs (Continued)
the Company's first quarter of fiscal year 2010. Under this plan, the Company recorded $65 million during the fiscal year ended July 3, 2009.
January 2009 Plan.
The January 2009 Plan included reducing worldwide headcount by approximately 4,100 employees, including a 20%
reduction in vice-president level employees. The January 2009 Plan is expected to result in total restructuring charges of approximately
$103 million and is expected to be largely complete by the end of the Company's first quarter of fiscal year 2010. Under this plan, the Company
recorded $100 million during the fiscal year ended July 3, 2009.
Pittsburgh Closure.
In September 2008, the Company announced the closure of its research facility in Pittsburgh, Pennsylvania, as part of
the Company's ongoing focus on cost efficiencies in all areas of its business (the "Pittsburgh Closure"). The Company ceased operations at this
facility during its fourth quarter of fiscal year 2009 and integrated certain activities into its other research and development facilities located
within the United States. During the fiscal year ended July 3, 2009, the Company recorded approximately $13 million of restructuring charges
associated with employee termination benefits, lease obligations, and other exit costs. In addition, as a result of the Pittsburgh Closure, the
Company has recorded approximately $26 million related to accelerated asset depreciation recorded as Product development expense on the
Consolidated Statement of Operations. Including the accelerated depreciation expense, the Pittsburgh Closure is expected to result in total
charges in the range of $50 million to $55 million.
Milpitas Closure. In July 2008, the Company announced the proposed closure of its media manufacturing facility in Milpitas, California,
as part of the Company's ongoing focus on cost efficiencies in all areas of its business (the "Milpitas Closure"). The Company ceased production
at this facility in September 2008 and all significant activities related to the closure were completed by the end of fiscal year 2009. From plan
inception through the fiscal year ended July 3, 2009, the Company has recorded
91
(Dollars in millions)
Employee
Benefits
Operating
Leases
Other
Exit
Costs
Total
May 2009 Plan
Accrual balances at June 27, 2008
$
—
$
—
$
—
$
—
Restructuring charges
64
—
1
65
Cash payments
(12
)
—
(
1
)
(13
)
Adjustments
—
—
—
—
Accrual balances at July 3, 2009
$
52
$
—
$
—
$
52
(Dollars in millions)
Employee
Benefits
Operating
Leases
Other
Exit
Costs
Total
January 2009 Plan
Accrual balances at June 27, 2008
$
—
$
—
$
—
$
—
Restructuring charges
100
—
1
101
Cash payments
(92
)
—
(
1
)
(93
)
Adjustments
(1
)
—
—
(
1
)
Accrual balances at July 3, 2009
$
7
$
—
$
—
$
7