Seagate axing 1,600 staff amid PC sales slump
Bean counter eye up $100m cost cuts
Seagate is flinging about three per cent of the workforce overboard to cut its cloth to match crappy PCs sales.
The drive maker lodged a filing with the US Securities and Exchange Commission last night that stated a restructuring plan had been approved to “reduce its cost structure”.
“The plan includes reducing the company’s global headcount by approximately 1,600 employees,” Seagate confirmed.
The cull should be done and dusted by the end of the coming September and is expected to result in pre-tax charges of $62m, largely consisting on termination costs, to be recorded in the current fiscal forth quarter.
Annual savings expected to be achieved are in the order of $100m, impacting both the cost of sales and op-ex. Segate sales have declined in all five of its previous quarters.
PC vendors made an inauspicious start to 2016, with first quarter sales slumping on the prior year period and analysts forecasting shrinkage for the rest of this year in all areas except convertable/ detachable lappies.
Seagate is not the only PC component manufacturer expunging human capital; WD confirmed earlier this month it is axing staff in the US; and Intel is in the process of chopping 12,000 heads globally. ®