Seagate lays off 3,000 employees, latest sign of slowdown in core PCs and cloud | Tech Rasta

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hard drive manufacturer Seagate Technology It said on Wednesday it plans to cut its global workforce by 8 percent, or about 3,000, citing economic uncertainty and declining demand for parts.

“In addition to improving our productivity To drive supply discipline and price stability We are working on a restructuring plan to reduce costs sustainably. This includes reducing our global workforce,” Seagate CEO Dave Mosley said in a talk with analysts.

The debt restructuring plan was announced after Seagate reported financial first-quarter results that did not meet Wall Street expectations for revenue and earnings per share.

The company’s shares fell more than 7 percent during Wednesday’s trading. and a decrease of more than 55% in 2022.

Mosley added that Seagate’s customers, including cloud service providers, have more inventory as they spend less on computers. He said he did not expect Seagate customers to use up all the pending parts in the current quarter.

The company will continue to pay dividends, Mosley said.

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Seagate manufactures hard drives and other components. that is often used in PCs and cloud servers.

Seagate’s layoff is the latest sign that demand for PCs and cloud servers is declining after two years of booming from the coronavirus pandemic.

on tuesday, MicrosoftThis makes the operating system for most PCs. It reported a 15% year-over-year decline in Windows license sales. Microsoft’s cloud business was short on expectations.

Seagate said its restructuring plan, which included layoffs, It will save the company approximately $110 million per year. and will be completed by the end of the March quarter of the Company. It said it expected to pay about $65 million in pre-tax expenses, mostly severance pay and other termination benefits.

Seagate reported its fiscal first-quarter adjusted earnings of 48 cents per share on Wednesday. That’s significantly lower than FactSet’s estimate of 71 cents per share.

Seagate’s revenue was $2.04 billion, which was under FactSet’s consensus of $2.1 billion.

Seagate said it expects revenue of $1.85 billion in the current quarter, well below FactSet’s $2.12 billion forecast.

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