Hard drive maker Seagate Technology said on Wednesday it plans to cut 8% of its global workforce, or about 3,000 employees, citing economic uncertainty and declining demand for its parts. “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 reduction in our global workforce,” Seagate CEO Dave Mosley said on a call with analysts. The restructuring plan was announced after Seagate reported fiscal first-quarter earnings that missed Wall Street expectations for revenue and earnings per share.
Seagate shares fell more than 7% during trading on Wednesday and are down over 55% so far in 2022. Mosley added that Seagate’s customers, which include cloud providers, have a build-up of inventory of parts because they are spending less on computers. He said he doesn’t expect Seagate’s customers to finish using up their parts backlogs in the current quarter. Seagate makes hard drives and other parts often used in PCs and cloud servers.
Seagate’s layoffs and lower demand are the latest sign that demand for PCs and cloud servers is deteriorating after two boom years driven by the pandemic. On Tuesday, Microsoft, which makes the operating system for most PCs, reported that Windows licensing sales dropped 15% on an annual basis. Microsoft’s cloud business also came up short versus expectations.
Source: https://www.cnbc.com/2022/10/26/seagate-will-cut-3000-employees-in-latest-sign-of-major-pc-and-cloud-slowdown.html
