Seagate Technology Inc.'s board fired Chairman and Chief Executive Alan Shugart, ousting the struggling disk drive maker's co-founder and dethroning a colorful Silicon Valley figure.
The world's top independent disk drive company named President Stephen Luczo, 41, to replace the 67-year-old Shugart as CEO. Luczo, a former investment banker at Bear, Stearns & Co., was brought in by Shugart as heir apparent in 1993.
Seagate, along with the rest of the disk drive industry, stumbled in the last two years as demand for personal computers slowed. Its shares have lost about half their value since August as prices for the drives, one of the main parts of a computer, tumbled and the company was late to introduce new models.
"Some new blood, especially in the very competitive disk drive marketplace, is probably a good move," said Matthew Russo, an analyst at Sands Brothers & Co. "Luczo has shown that he's up for the task."
Luczo is pushing the company into software, generally a more profitable business, and plans in the next year to sell a stake of its Seagate Software unit through an initial public offering.
The decision to replace Shugart was unanimous among Seagate's outside directors, a company spokesman said.
Seagate shares rose 6 cents to $24.19 on the NYSE.
Shugart, who has had stormy relationships with his executives in the past, said the decision came as a surprise.
Shugart expects to be at Seagate for a few more weeks and then to get an office in Santa Cruz, just down the road from Seagate's headquarters in Scotts Valley.
"If nothing else, I've more time for surfing," Shugart said.
Shugart, who was on the team at IBM that invented the disk drive, has long been a spokesman for the industry.
He co-founded Seagate in 1979 after 18 years with IBM and pioneered the miniaturization of mainframe hard disk drives for personal computers.
Last week, Seagate said fiscal fourth-quarter profit fell, but not as much as expected, as cost cuts and strong sales of its high-end storage products helped blunt a sharp drop in prices of PC disk drives.