Axeman arrives at Seagate

Seagate logoHard-disk drive maker Seagate Technology is cutting more than 1,600 jobs, or three percent of its workforce, as the company looks to rein in costs amid waning demand.

The Cupertino outfit is a top producer of drives that store data in personal computers, a market that has declined. It has developed products in newer sectors such as cloud storage, and bought Dot Hill Systems in October for about $696 million to enhance its cloud offerings. However that does not appear to have been enough.

Seagate said the restructuring is expected to result in total pre-tax charges of $62 million and is likely to be completed by the end of the September quarter.

The restructuring would result in about $100 million in savings on an annual run rate basis, the company said.

The company, which has about 52,000 employees worldwide, had said in September it would cut 1,050 jobs.

Seagate’s revenue declined in the past five quarters due to weak demand from original equipment manufacturers, including personal computers makers. In the third quarter, Seagate swung to a loss as revenue fell 22 per cent, to $2.6 billion, amid “several near-term demand factors.” It is not all its own fault. Fellow disk-drive maker Western Digital, which bought SanDisk in May, reported a revenue decline of 21%, to $2.82 billion, for its April 1 quarter.

The restructuring appears to have come after a bit of a management reshuffle. The company  named a new chief financial officer, David Morton  in October, and said Monday that William Mosley would become its president and chief operating officer.