Hard-drive maker Seagate Technology plans to cut its workforce by 7 percent, or about 2,940 workers, to help chop operating costs by about US$150 million this year as it seeks to get through a slow sales period in the hard-drive marketplace.
In a conference call 'ast Wednesday with financial analysts, Seagate executives updated their financial outlook for the company's fourth quarter, which ends July 2, noting that lower demand in the mobile storage market could trim its market share in that segment by 2 percent to 3 percent. Demand in the personal storage products segment is also expected to be down for the quarter, to 45 million or 46 million total units from an earlier projection of 48 million units, the company said.
The company expects to take a charge of approximately US$50 million in the current quarter as part of the restructuring.
Steve Luczo, Seagate's CEO and chairman, said during the conference call that 7 percent of the company's worldwide workforce would be cut to shave costs but that no facilities would be closed. The majority of the job cuts will come by the end of the year, he said. Seagate is still actively looking for other areas to cut costs.
The Scotts Valley, Calif.-based company has about 42,000 workers, according to its Web site.
Seagate will announce its fourth-quarter and full-year results in late July.
In April, Seagate posted revenue of US$1.39 billion for its third quarter, which ended April 2, and net income of US$159 million. That compares with revenue of US$1.62 billion and net income of US$174 million in the same quarter the previous year.
For the first nine months of the current fiscal year, Seagate reported revenue of US$4.89 billion and net income of US$563 million, compared with revenue of US$4.93 billion and net income of US$481 million for the same period last year.
The company noted in April that the reduction in notebook hard-drive shipments, from an expected 1.6 million drives to actual shipments of about 1 million drives, had the biggest impact on Seagate's third-quarter earnings results.