Seagate has announced that its Q4 revenue would be $2.65 billion, beating expectations of $2.34 billion, and up from the $2.3 billion guidance. But that has not stopped the outfit decimating its staff by more than 14 percent. That’s more than decimation.
On the face of it, everything is brilliant for Seagate. The company also reported gross margin of 25 percent and non-GAAP gross margin of approximately 25.8 percent for the fiscal fourth quarter 2016, up from the previous 23 percent forecast.
But this news was so brilliant the outfit was forced to lay off 14 percent of it workforce, or some 6,500 people. This is odd really because the Romans used to decimate its army ranks when they performed poorly in battle as an incentive to those left. It looks like Seagate’s staff, having won the battle, were decimated any way. We guess that the remaining staff will probably lack the motivation to go the extra mile ever again, knowing that they will be fired whatever they do.
The company said that it had another restructuring plan for “continued consolidation” of its global footprint across Asia, EMEA and the Americas. The plan includes reducing the Company’s global headcount by approximately 6,500 employees, or 14 percent of its global headcount by the end of fiscal year 2017.
The total pretax charges for the plan – that’s redundancy money – will be approximately $164 million in fiscal year 2017. The restructuring activities and global footprint consolidation underway should let the outfit to be operating within its targeted Non-GAAP product gross margin range of 27-32 percent by the December 2016 quarter.
Whatever that means in Seagate lingo.