Storage manufacturer Seagate is preparing to axe up to 1,600 jobs, some three per cent of the firm's workforce, as part of a wider attempt to save $100m a year in business expenses.
The plan follows a sharp fall in demand for Seagate's hard disk-based storage products, and is expected to come into play before the end of September. The restructure will result in pre-tax charges of $62m, which the company will hope to account for in its Q4 results.
Seagate reported a $21m loss in April in the company's Q3 results. Revenue of $2.6bn represented a year-on-year downslide of 21 per cent. The firm made a $291m profit during the same period in 2015.
Seagate chief executive Steve Luczo said in April: "Our quarterly results fell short of our expectations as a result of several near-term demand factors. Despite these challenges, we believe that we have the product portfolio, technology roadmap and operational leverage to ensure that we are well positioned for long-term success.
"Accordingly, we are aggressively working to position Seagate to respond to new demand levels, and are committed to ongoing financial discipline."
Luczo also mentioned a plan based on "broadening [Seagate's] storage portfolio to meet the needs of [a] growing global consumer base", although there seems little room for innovation beyond focusing more on solid state drives than hard disk drives in a market in which the company has slipped far behind its rivals.
Seagate became the first company to begin shipping 8TB hard drives two years ago, aiming at data centres and preaching a vision of a more "mobile" world that demanded "cost-effective storage".
Flash storage is now becoming the norm as prices continue to drop, and Seagate's delayed reaction in the market is apparently costing the firm dear in an already crowded space.
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