Seagate will cut 3,000 employees in latest sign of major PC and cloud slowdown

Hard thrust shaper Seagate Technology said connected Wednesday it plans to chopped 8% of its planetary workforce, oregon astir 3,000 employees, citing economical uncertainty and declining request for its parts.

"In summation to adjusting our accumulation output, to thrust proviso subject and pricing stability, we are implementing a restructuring program to sustainably little costs, including simplification successful our planetary workforce," Seagate CEO Dave Mosley said connected a telephone with analysts.

The restructuring program was announced aft Seagate reported fiscal first-quarter net that missed Wall Street expectations for gross and net per share.

Seagate shares fell much than 7% during trading connected Wednesday and are down implicit 55% truthful acold successful 2022.

Mosley added that Seagate's customers, which see unreality providers, person a build-up of inventory of parts due to the fact that they are spending little connected computers. He said helium doesn't expect Seagate's customers to decorativeness utilizing up their parts backlogs successful the existent quarter.

The institution volition support paying a dividend, Mosley said.

Seagate makes hard drives and different parts often utilized successful PCs and unreality servers.

Seagate's layoffs and little request are the latest motion that request for PCs and unreality servers is deteriorating aft 2 roar years driven by the pandemic.

On Tuesday, Microsoft, which makes the operating strategy for astir PCs, reported that Windows licensing income dropped 15% on an yearly basis. Microsoft's unreality concern besides came up abbreviated versus expectations.

Seagate said that its restructuring plan, which includes the layoffs, would prevention the institution astir $110 cardinal per twelvemonth and would beryllium completed by the extremity of the company's March quarter. It said it expected to wage pre-tax charges of astir $65 million, mostly for severance and different termination benefits.

Seagate reported adjusted fiscal first-quarter net of 48 cents per stock connected Wednesday, importantly beneath FactSet statement expectations of 71 cents per share.

Seagate's gross was $2.04 billion, which besides came successful nether the FactSet statement of $2.1 billion.

Seagate said it expected $1.85 cardinal successful gross successful the existent quarter, nether FactSet expectations of $2.12 billion.