Seagate restructuring plan will shed 6,500 jobs

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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    • sweatshopking
    • 4 years ago

    AWESOME! CUT YOUR R&D AND MANUFACTURING AND SCREW YOUR LONG TERM SO YOU CAN MAKE HIGHER (they actually beat their own forecast) SHORT TERM PROFITS FOR SHAREHOLDERS. WELL DONE.

    • gmskking
    • 4 years ago

    Say goodbye Seagate. Say goodbye Western Digital. None of you innovated. Just kept making same old crap and hope that it would last forever.

      • Krogoth
      • 4 years ago

      They have been innovating. It is nothing short of an engineering marvel that they managed to cram over 2TiB of onto a single platter. Flash media hasn’t gotten that far yet.

      They are up against the laws of physics and diminishing. The flash media companies are also contenting with them as well.

      Kiddies are just spoiled rotten and don’t remember that it wasn’t that long ago that 1TiB of capacity was only in the enterprise realm.

    • Chrispy_
    • 4 years ago

    As unsurprising as this is, it’s really bad news.

    The storage industry is still growing at a vast rate, it’s just moving from consumer PCs to enterprise storage where all your cloud data is.

    There are only three players in town; Seagate, WD and Toshiba.

    Toshiba are effectively the old 3.5″ Hitachi business, but small fry compared to WD or Seagate
    HGST is just WD under a new label and not really related to the old Hitachi business
    Seagate is the only competitor to WD across 2.5″, 3.5″ and SSHD models.

      • chµck
      • 4 years ago

      I’d still prefer a HGST hard drive to a WD drive.

        • Chrispy_
        • 4 years ago

        Depends on when that model was first made. HGST was sold to Toshiba in 2012 and a lot of the very reliable models that the WD-owned HGST sold were actually 100% Hitachi developed and produced by Hitachi staff in Hitachi factories. The only difference is that they were making profits for WD instead of Hitachi from March 2012 onwards.

        If you read Backblaze reports, you’ll notice that the newer HGST models from 2013 onwards are less reliable with failure rates closer to WD and Seagate’s. I’d speculate that it’s because once WD phased out the old all-Hitachi lines, they replaced them with their higher-profit, more-corners-cut design and manufacturing practices, resulting in the 2014 and 2015 models being notably worse.

        If you want the design team and production experience that was responsible for HGST’s good 3.5″ drive reputation, you need to look at Toshiba from now on.

    • JustAnEngineer
    • 4 years ago

    Buggy whips.
    [url<]https://www.youtube.com/watch?v=uIty7vFwVYM&t=00m31s[/url<]

    • smilingcrow
    • 4 years ago

    Rag and bone.
    Any old iron, any old iron.

    • demani
    • 4 years ago

    Hopefully it’s the old Seagate guys that are heading out and the Samsung folks can step up now.

      • w76
      • 4 years ago

      The important Samsung guys, working on SSDs, are still at Samsung. Samsung only sold off the part with no future, the HDD division, as far as I know.

        • demani
        • 4 years ago

        No- Spinning platters will be going on for years. I’m not storing my movies on SSDs and I doubt you are either.

        And those Samsung hard drives were very good pieces of equipment.

    • TwoEars
    • 4 years ago

    Something tells me those 6500 guys and gals weren’t in the ssd division. Seagate better get with the program.

      • albundy
      • 4 years ago

      their SSDs fared far better than any other product they had. i still have their 240GB ssd running strong for a few years now.

      • Krogoth
      • 4 years ago

      Seagate has be getting with the program. They are focusing on bulk data storage and enterprise markets.

      HDD still win in data density and TiB/$$$ ratio for datacenters that don’t need super-fast access speeds.

    • divide_by_zero
    • 4 years ago

    I hope they kept the quality control guy on staff.

      • demani
      • 4 years ago

      He will be released and then rehired as a contractor. That way they can call him in for the three days a year they actually want him there.

      • SomeOtherGeek
      • 4 years ago

      They didn’t, but they kepy his boss tho.

      That is exactly what my company (Xerox Systems) did, laid off everyone in my group, all programmers, but kept the boss. For the life of me I figure that out. Not at all happy about it.

      • Vhalidictes
      • 4 years ago

      Considering that this is Seagate, I think those guys were let go a long time ago.

      I’m trying to remember when the rot set in, it was probably between 2005 and 2007. It was right around the time that Seagate bought out Maxtor – remember them?

      I guess the strategy was to do things the Maxtor way going forward…

      • Farting Bob
      • 4 years ago

      Well he was only a part time intern anyway so it wont save them much.

      • albundy
      • 4 years ago

      haha, because they have none to begin with.

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