In Business This Week: HEADLINER

ALAN SHUGART: DON'T SLAM THE DOOR ON YOUR WAY OUT

The end of Alan Shugart's reign at Seagate Technology was a shock. He was told of his ouster by Larry Sonsini, an old friend and adviser to Seagate's board on a Saturday afternoon. "The only thing I could get out of them was that it was time for a change and that it was time for me to retire," says Shugart, 67. "I think it's unadulterated B.S., but I'm not allowed to say bad things about them."

Co-chairman Larry Perlman insists the board tried to work out a smooth departure for two years. Seagate has struggled of late. Its share in high-end drives has dropped from 80% to 40% since early 1997. And Seagate's 1996 purchase of Conner Peripherals, a maker of low-end drives, didn't pay off. Shugart will be replaced by Stephen Luczo, 40, a former investment banker Shugart hired in 1993.

Shugart had made progress, though, reporting a $25 million profit in the June quarter. Indeed, Luczo says there'll be no major shift in strategy, but he'll probably revamp management. Says a rival: "He'll be surrounded with people who Al took very good care of. I think more shoes will drop."By Peter Burrows