Hutchinson Technology (Hutchinson, Minnesota) said that it is reducing its operating costs in order to achieve FY08 profitability at anticipated levels of demand for its suspension assembly products. The reductions will include the elimination of about 500 positions, affecting employees at the company’s facilities in Hutchinson and Plymouth, Minnesota; Eau Claire, Wisconsin and Sioux Falls, South Dakota. The workforce reductions are expected to be complete by the end of June 2007.

The company said it expects its financial results for its fiscal third quarter ending June 24, 2007 to include a pre-tax charge of around $5 million, or 11 cents a share, primarily for severance costs. The workforce reductions and other cost-cutting actions are expected to reduce expenses by around $35 million annually.

Wayne Fortun, Hutchinson Technology’s president/CEO, said the cost reduction efforts at the company were made necessary by current market conditions. “As discussed in our second quarter results announcement, we continue to have excess capacity, and we expect to incur a loss in 2007” said Fortun. “We are reducing our cost structure and aligning our staffing levels with demand to position the company to achieve profitability in 2008 and beyond.”

Fortun said, however, that the company will continue to make strategic investments in the additive process required for its TSA+ suspension assemblies and in the commercial introduction of its InSpectra StO₂ tissue oxygenation monitor.