Seagate set to cut thousands of jobs following difficult results
Storage giant Seagate has announced plans to axe 3,000 jobs as part of cost-cutting measures, around 8% of its international workforce.
The news comes after revenues at the firm – which is one of the world’s most successful hard drive manufacturers – declined 35% to $2.04 billion in the first quarter of its 2023 financial year.
However, the company maintains that it is still profitable, reporting a $29 million profit in the three months that ended September 30 – although this represents a year-on-year decline of 94% from the $526 million recorded in 2021.
Seagate cuts
The layoffs come as part of wider plans at the firm to cut costs.
“In addition to adjusting our production output, to drive supply discipline and pricing stability, we are implementing a restructuring plan to sustainably lower costs, including a reduction in our global workforce,” Seagate CEO Dave Mosley told analysts on a call reported by CNBC.
The chief told analysts on the call that the measures are expected to save around $110 million per year and are set to be finalized by March 2023.
Seagate has not yet provided any indication of where the cuts will fall geographically, but the announcement could end up hitting UK workers hard.
Seagate employs around 1,400 people in Springtown, Derry-Londonderry, Northern Ireland, and operated in the area for about 25 years.
Local politician Shaun Harkin told The Belfast Telegraph that workers at the factory are “very concerned”.
Regardless of the firm’s recent performance, shareholders are still set to get their dividends.
The company’s Board of Directors has declared a quarterly cash dividend of $0.70 per share to be paid on January 5, 2023
A key factor in the decline of Seagate’s revenue could be the fall in the demand for PCs more generally.
Worldwide PC shipments have experienced the steepest decline since analyst firm Gartner began tracking the market in the mid-1990s.
PC shipments totalled 68 million units in the third quarter of 2022, a 19.5% decrease from the third quarter of 2021, according to the analyst’s statistics.
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