Seagate Technology Holdings Plc, the biggest maker of computer hard drives, said it’s cutting about 3,000 jobs in a restructuring plan aimed at reducing costs amid slowing demand.
(Bloomberg) — Seagate Technology Holdings Plc, the biggest maker of computer hard drives, said it’s cutting about 3,000 jobs in a restructuring plan aimed at reducing costs amid slowing demand.
“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,” said Chief Executive Officer Dave Mosley. “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.”
The company also released its fiscal first-quarter financial results that missed analysts’ expectations. Sales in the period ended Sept. 30 were $2.04 billion, missing analysts’ average estimate for $2.12 billion, the Fremont, California-based company said in a statement early Wednesday. That compares with an average analyst estimate of $2.2 billion. Adjusted earnings per share were 48 cents, far below estimates for 75 cents. The shares fell almost 6% in early trading in New York and have lost almost half their value this year.
Like many of its peers in the computer component industry, Seagate has already warned investors that demand is drying up after several quarter of rapid growth. Companies and government departments are slowing their investment in computer networks, causing a buildup in unused parts.
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