Seagate to lay off 1,050 workers – 100 in valley

The sliding market for personal computers is claiming 1,050 jobs at Seagate Technology.

In a filing with the Securities and Exchange Commission on Thursday, the Cupertino disk drive maker said the layoffs were part of a restructuring plan “intended to realign its cost structure with the current macroeconomic business environment.”

The layoffs are divided equally between the U.S. and overseas locations, a company spokesman said. About 100 employees will be laid off in Silicon Valley.

Slowing PC sales have hit a number of Silicon Valley tech companies, including Intel, which derives the biggest part of its revenue from sales of chips that power PCs. But the reference to the “macroeconomic” business environment could be a sign that sales of its server drives are slowing in China. Seagate, in addition to selling to major PC makers Hewlett-Packard, Dell and Lenovo, also makes drives for data centers servers which it sells to such companies as Amazon, Facebook, Baidu, Tencent and others.

“They’ve been seeing a lot of growth in the enterprise cloud, selling drives to people like Facebook and Amazon to store data,” said Jayson Noland of Robert W. Baird & Co. “That’s a tailwind to their business, but the obvious headwind is the PC issue.”

Seagate said the layoff is about 2 percent of the firm’s global headcount, according to the filing.

The company said it will complete the layoffs by the end of December, and take a pretax charge of about $53 million in termination costs.

“The savings generated from these restructuring activities are expected to amount to approximately $113 million,” Seagate said in its filing.

 

Photo: The Seagate Backup Plus Slim Portable Drive for Mac (Courtesy Seagate)

 

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