Seagate restructuring plan will shed 6,500 jobs

— 3:40 PM on July 12, 2016

Seagate reported some preliminary financial results for its fiscal fourth quarter today. The company took in $2.65 billion in revenue on 37 million hard drives sold during the quarter, with a gross margin of 25%. Seagate further expects growth in demand for storage to exceed the areal density growth of its products "for the foreseeable future," meaning it expects to continue selling lots of hard drives. Despite that outlook, however, Seagate is also announcing a new restructuring plan today that will result in an estimated 6,500 layoffs by the end of its fiscal 2017. That number represents 14% of the company's employees, according to its own data.

Seagate says it's making this move to consolidate its global operations, which span Asia, Europe, the Middle East, Africa, and the Americas. The company says it'll record pre-tax charges of about $164 million as part of the plan. Ultimately, Seagate thinks this move will allow it to meet its non-GAAP gross margin target of 27% to 32% by December of this year. The company will release full financial results ahead of market openings on August 2, 2016.

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