Seagate Technology Cutting 6,500 Jobs Over Coming Year

Seagate Technology Cutting 6,500 Jobs Over Coming Year

By: Daniel Steingold | July 11, 2016

In a cost-cutting move, Seagate Technology, an American data storage provider, has announced that it expects to cut 6,500 jobs over the next year.

The lost positions will affect 14 percent of Seagate’s total workforce, with jobs being eliminated in the Americas, Asia, Europe, Africa, and the Middle East.

The cuts are expected to cost Seagate $164 million over the coming fiscal year, half of which will be in employee termination expenses.

Seagate’s announcement comes shortly after the corporation announced late last month that they would eliminate 1,600 jobs globally.

Seagate took a $21 million loss last quarter, and revenue declined from $3.3 billion to $2.6 billion year-to-year.

With shifting technology in the storage space— such as cloud computing— Seagate hasn’t been able to completely keep pace. In 2014, they purchased San Jose-based firm LSI Corp’s flash business in an attempt to broaden their reach, hoping to "deliver a full suite of storage solutions ... for the growing flash storage market."

Although there continue to be questions about Seagate on Wall Street— in particular, its dividend yield, which is considered an unsustainable 11 percent— its stock rose from $24.14 to $27.07 in after-hours trading.

Seagate’s total workforce currently has 52,000 employees. The job cuts are expected to primarily be in manufacturing operations.

Western Digital is the largest player in the data storage space, and they are also Seagate’s biggest competitor.

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