Seagate Technology has decided to end its 37-year relationship with Scotts Valley.
Seagate notified its 130 Scotts Valley employees in a letter last week that the company would not be renewing its lease at 4575 Scotts Valley Drive in May 2017, and moving out of its hometown altogether.
The move will mark the end of a nearly four-decades-long presence in Scotts Valley for the technology giant.
Although Seagate took on more of a conservative corporate manifestation in recent years, in the 1990s it was not uncommon to see the billion-dollar-company’s co-founder and president, Al Shugart, around town in his gaudy Hawaiian shirts. Shugart died of heart failure in 2006 at 76.
The move represents another postscript at the end of the high-tech boom in Scotts Valley, a decline that began when Borland and Netflix moved their headquarters “over the hill” to Silicon Valley in the 1990s.
It is unclear where the IT and motor groups that occupy the building will end up. Seagate corporate headquarters is in Cupertino, with another facility in Fremont.
“We expect to relocate operations in Scotts Valley to other Seagate locations, but plans for that are still being developed so we have no details to share right now,” said Eric Eric DeRitis, Seagate senior director of executive communications, in an interview this week. “We would like to thank the city and community of Scotts Valley for its support over the years.”
City Manager Jenny Haruyama said Tuesday the Seagate move was not unexpected.
“For nearly 40 years, Seagate has been a great business partner and a marquee company whose presence has helped our community thrive,” she said. “We sincerely appreciate their longevity and knew this transition was inevitable. That being said, with change comes opportunity, and the city is looking forward to future economic- development possibilities.”
There was a time when Seagate, the world’s leading maker of disc drives, served as a cornerstone of Scotts Valley. The company was one of the state’s largest employers in the mid-1990s. But as the hard-drive niche consolidated and became more of a commodity, Seagate strived for a competitive edge.
Hard-drive manufacturing was shut down in Scotts Valley in 1984 and moved to Singapore. The company took itself off the stock market in 2000 and went private in a $20 billion stock swap. Two years later, Seagate became public again, this time selling on NASDAQ. Seagate (STX) stock closed at $33.71 a share on Tuesday, down from a year’s high of $40.91.
In 2010, saying that the company wanted to streamline and be closer to its customers in Silicon Valley, Seagate shut down its corporate headquarters at 920 Disc Dr., where it owned three buildings.
At that time, about 440 positions in Scotts Valley were consolidated into one central location in a high-rise office building at 10200 S. De Anza Blvd. in Cupertino.
