Seagate to cut 3,000 jobs amid falling sales
The data storage company plans to reduce its global workforce by 8%, or about 3,000 employees, as it looks to cut costs during a time of economic uncertainty and declining demand.
Seagate recorded revenues of USD 2,035 million during its first quarter of the fiscal year 2023, a drop from USD 3,115 million during the same period the year before. Net income amounted to USD 29 million during the first fiscal quarter of 2023, a significant drop compared to USD 526 million during the comparison period.
“Global economic uncertainties and broad-based customer inventory corrections worsened in the latter stages of the September quarter, and these dynamics are reflected in both near-term industry demand and Seagate's financial performance. We have taken quick and decisive actions to respond to current market conditions and enhance long-term profitability, including adjusting our production output and annual capital expenditure plans, and announcing a restructuring plan that will deliver meaningful cost savings while maintaining investments in the mass capacity solutions driving our future growth,” says Dave Mosley, Seagate’s CEO, in the fiscal report.
The company’s board of directors has approved and committed to a restructuring plan aimed at reducing its cost structure to "better align the company’s operational needs to current economic conditions while continuing to support the long-term business strategy."
This plan includes reducing its worldwide headcount by about 3,000 employees, or 8% of the global workforce, along with other cost-saving measures.
Seagate says that it expects the restructuring plan to be more or less completed by the end of the second quarter of fiscal 2023, and that it is expected to result in total charges between USD 60 million and USD 70 million. The costs will primarily consist of employee severance and other one-time termination benefits.
With the restructuring plan set in motion, Seagate expects to realise run-rate savings of approximately USD 110 million on an annualised basis starting in the third quarter of fiscal 2023.