Seagate, a maker of disk drives for computers said it will cut about 1,600 jobs — or 3 percent of its workforce — as part of a restructuring plan that should be complete by the end of September.
The company added in a regulatory filing that it expects to take a charge of $62 million in its fiscal fourth quarter. Charges will cover employee termination costs. However, Seagate also said it will save about $100 million a year.
PC components makers are suffering the biggest decline in demand for the devices since the industry was born in the early 1980s. Worsening the impact, Seagate’s spinning magnetic disk technology is being replaced by storage based on semiconductors, a technology it doesn’t have.
The storage company has been struggling with slump in demand for PCs, and in April, cut its outlook. For its fiscal third quarter, Seagate reported a net loss of $21 million, or 7 cents a share, on revenue of $2.6 billion. On a non-GAAP basis, Seagate reported earnings of $66 million, or 22 cents a share, for the third quarter.
At the time, Seagate CEO Steve Luczo said the company’s product portfolio was strong, but the “short-term dynamics of our industry are challenging”.