Drive maker Seagate plans to slash 8% of its workforce by year’s end, about 3,000 workers, in response to lower demand alongside global economic concerns.
The company’s stock dropped 8% on Wednesday as it announced the job restructuring and revenues of $2.04 billion for the quarter ended Sept. 30. Revenues for the quarter were 35% below the $3.1 billion from a year earlier. Earnings per share dropped to 14 cents down from $2.28 a year earlier.
CEO Dave Mosley said global economic uncertainties and customer inventory corrections downward led to the cuts. “We have taken quick and decisive actions to respond to current market conditions and enhance long-term profitability,” he said in a statement. The restructuring plan will “deliver meaningful cost savings while maintaining investments in mass capacity solutions driving our future growth.”
He said there is still strong “engagement” from cloud customers. Data demands are growing at a fast clip, requiring mass capacity storage for years to come, analysts have noted.
“Seagate is in a great position to capture growth opportunities over the long-term,” Mosley added. In a call with analysts, he added, “I’m confident Seagate will navigate through these…conditions.”
Job cuts are on the minds of many tech CEOs. Chipmaker Intel has already forecast some job cuts that are coming and might offer more insight at its earnings call on Thursday.
Seagate said its December quarter is expected to produce $1.85 billion in revenue, with earnings per share of 15 cents. One year earlier, revenues were $3.12 billion with earnings of $2.23 per share.
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