Seagate set to cut thousands of jobs following difficult results
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Storage giant Seagate has announced plans to cut 3,000 jobs as part of cost-cutting measures, about 8% of its international workforce.
The news comes after revenue for the company – which is one of the world’s most successful hard drive manufacturers – fell 35% to $2.04 billion in the first quarter of fiscal 2023.
However, the company maintains that it is still profitable and reported a profit of $29 million in the three months ended September 30 — though that represents a 94% year-over-year decline from the $526 million it reported. was registered in 2021.
Seagate cuts
The layoffs are part of wider plans at the company to cut costs.
“In addition to adjusting our manufacturing output to drive supply discipline and price stability, we are implementing a restructuring plan to sustainably reduce costs, including a reduction in our global workforce,” Seagate CEO Dave Mosley told analysts during a phone call that was reported by CNBC (opens in new tab).
The chief told analysts on the call that the measures are expected to save about $110 million a year and be completed by March 2023.
Seagate has not yet given an indication of where the cuts will fall geographically, but the announcement could hit UK workers hard.
Seagate employs approximately 1,400 people in Springtown, Derry-Londonderry, Northern Ireland, and has been operating in the area for approximately 25 years.
Local politician Shaun Harkin said: The Belfast Telegraph (opens in new tab) that the workers in the factory are “very concerned”.
Regardless of the company’s recent performance, shareholders will still receive their dividends.
The company’s board of directors has announced that a quarterly cash dividend of $0.70 per share will be paid on January 5, 2023.
A major factor in Seagate’s revenue decline could be the general decline in PC demand.
Global PC shipments have seen the sharpest decline since analyst firm Gartner began tracking the market in the mid-1990s.
In the third quarter of 2022, there were a total of 68 million PC shipments, down 19.5% from the third quarter of 2021, according to the analyst’s statistics.