Seagate axes thousands
Seagate's board has given the go ahead for a seven per cent workforce reduction designed to improve the company's bottom line.
Seagate expects to chop about 3,000 jobs, which should cut annual operating costs by close to $150m. Seagate will take a $50m charge in its current quarter for the move. The hard-disk drive maker has been struggling to deal with big fluctuations in demand for its products.
While the markets for server and notebook drives have held steady, the desktop market has waned. Competitive pricing from competitors Maxtor, Western Digital, Hitachi and Toshiba has also put pressure on Seagate.
Some workers will take voluntary retirement packages, while others will be handed severance packages over the course of this year.
On a more positive front, Seagate vowed to wow the market with a series of product announcement in the coming weeks. Some of these products should open up new markets, Seagate said, while not providing more detail.
Analysts, on average, are looking for Seagate to post a 1 cent per share profit in its current quarter on revenue of $1.38bn. ®