Heads are rolling at Seagate. The storage company says it has kicked off a new restructuring plan that will shed about 2.5% of its work force—that's roughly 1,100 employees.
Seagate plans to complete the layoffs by the end of July, and it expects annual savings of $125 million to stem from the move. Before tax, though, this restructuring effort should cost Seagate about $72 million (largely in "employee termination costs").
This won't be the storage firm's first round of firings in recent months. For its 2009 fiscal year, which started on June 28, 2008, Seagate says it will have slashed labor costs "in excess of 25%" through "attrition and restructuring."
Seagate believes layoffs are necessary if it wants to start turning a profit again during the next fiscal year. If I have my math right, the company has lost $709 million during the current fiscal year so far. (It posted $60 million profits in Q1, followed by $273 million losses in Q2, and $496 million losses in Q3.)