The volatility of the computer hard disk drive market has led to 80 job losses in Quantum Peripherals in Dundalk. The move, announced yesterday, is part of an international restructuring, involving 750 to 800 job losses.

"This is the right move at this time," an IDA spokesperson said, after the company made the announcement yesterday. The Quantum group has received £4.25 million (#5.4 million) in grant aid from the IDA since it arrived in Dundalk in 1991.

Workers were briefed in meetings yesterday and the job losses are expected to begin early next year. The weight of the restructuring, however, is being borne by the company's US-based operation. The group's new focus on the desktop hard disk drive sector is expected to secure the remaining 340 jobs in Dundalk.

"The growth of the low-cost PC market has become a challenge for virtually every company in the PC supply chain, and Quantum is no exception," said Mr John Gannon, president of Quantum's hard disk drive group.

There has been strong growth in the low-cost PC market and this has created pricing pressure for Quantum. It believes its restructuring plan will allow it to make changes that will strengthen its position in this market segment. "Here in Dundalk, we will be continuing to switch the focus of our work away from hard disk drive operations and continue to move in to the growing storage systems market and take advantage of other business opportunities as they arise," said Mr Dermot Short, European operations director.

To consolidate its position in the growing low-cost desktop market, Quantum will focus on as yet unannounced product development programmes.

Group restructuring has been under way for the last year. Following this latest stage, involving the job cuts in Dundalk and the US, the group expects to make $100 million (#94 million) in cost savings per year from 2001 in its hard disk manufacturing.

The company will work on designing and making products that are different from those of their competitors, so that it can sell at the prices it requires rather than at market-based prices.

"This restructuring will keep them at the top of the market and is a sensible move," the IDA spokesman said. The unpredictability and fierce competition in the hard disk drive market was blamed for the closure of the Seagate plant in Clonmel last year, with the loss of 1,000 jobs. In the computer industry in general, several manufacturers have announced the closure or reduction in scale of lower cost operations over the past year, with many being encouraged by the IDA to move to higher-value product lines.