Disk-drive manufacturer Seagate Technology will clear out the majority of its Scotts Valley campus and move its corporate headquarters to Cupertino, the company announced this week.
Beginning in April, the company will consolidate its Scotts Valley corporate offices with retail and sales teams based in Sunnyvale and Santa Clara, moving into a central campus in Cupertino.
The move is designed to improve efficiency and collaboration among the company’s branches, public relations director Brian Ziel said.
“No jobs are being affected by the move,” Ziel said. “There are no workforce reductions. This is a facilities reduction only.”
In Scotts Valley, Seagate has about 250,000 square feet of office space and employs 600 people. Ziel said fewer than half of the workers at the Scotts Valley offices live in the city. The move will relocate more than 400 people from Scotts Valley to Cupertino.
After the move is complete, two Seagate branches — the information technology team and the motor group — will remain in Scotts Valley in two office buildings on the west side of Scotts Valley Drive, near City Hall and the police department.
The people in those groups, fewer than 200 in all, will use 50,000 to 60,000 square feet of office space, Ziel said.
The move will begin in April or May and be finished in June 2011.
“It breaks my heart to lose them, because they’ve been such a vital part of Scotts Valley’s growth through the years,” City Councilwoman Donna Lind said. “They have been a huge support to the community and local businesses — restaurants, salons, groceries. It definitely hurts right now.”
The company has not decided what to do with its campus on the east side of Scotts Valley Drive once it is empty.
“We do own the buildings now, and we will evaluate the best use of these buildings over the coming year,” Ziel said.
The hotel business in Scotts Valley will suffer because of the move, according to folks in that industry.
“It’s horrible. I wish they’d be staying,” said Rich Higdon, Hilton Santa Cruz-Scotts Valley general manager. “It just seems like all the business is leaving Scotts Valley.”
Higdon said the Hilton has had a special negotiated rate with Seagate since the hotel opened its doors in 1999. He declined to say how many stays the disk-drive maker books annually.
“We’re very sad to see them go,” Higdon said. “Their business has declined, as has ours, with the recession.”
To adjust, he said, the hotel will have to tweak its strategy.
“Definitely targeting other business over the hill,” Higdon said. “We’ll try to lure more meeting business this direction.”
In the past five years, three major tech companies have moved most of their operations from Scotts Valley. In 2005, Borland Software Corp. moved its headquarters to Cupertino, and in 2009, computer chipmaker Avisa Technology declared bankruptcy while trying to sell its property on Kings Village Road. Now, Seagate will move the majority of its local operation to Cupertino.
During that same time period, however, Scotts Valley gained a couple of new employers. The city lured Easton-Bell Sports from Santa Cruz to Scotts Valley in 2008, adding 125 employees and corporate visitors, and Central Home Supply opened in town, also adding to the city’s sales tax revenue.
Seagate, founded in Scotts Valley in 1979, has undergone major changes in recent years.
In January 2009, the company trimmed 2,950 employees through layoffs. Another 1,100 employees were let go in May of that year. Seagate then closed a hard-disk manufacturing plant in Singapore in August and laid off 2,000 workers as a result.
Seagate’s stock bottomed out at $3.04 a share in March 2009 but has rebounded in the past year, with a 52-week range between $9.50 and $21.35 on the Nasdaq exchange.
In January, the company’s board of directors voted to change the company’s incorporation from the Cayman Islands to Ireland.
