Seagate to Lower 3,000 Jobs Amid Poor Quarter, Prices of Export Violations

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Seagate on Thursday introduced plans to chop down its laborious drive manufacturing and scale back its workforce by 3,000 individuals as a consequence of considerably decrease demand for HDDs that it confronted within the first quarter of its fiscal 2023. The corporate’s Q1 of FY2023 was the corporate’s worst quarter in 15 years as its earnings barely exceeded $2 billion and the corporate’s web revenue dropped by 18 occasions year-over-year. Additionally, Seagate is going through fees for delivery laborious drives to Huawei.

Exabytes Shipments Decline for First Time

Seagate doesn’t disclose the variety of laborious drives it ships per quarter, however unit gross sales of HDDs have been regularly taking place for years, whereas exabytes shipments have been rising. In Q1 FY2023 every part modified as Seagate’s HDD capability dropped to 118.2EB, down from 154.6EB within the earlier quarter and 159.1EB from the identical quarter a yr in the past.  

(Picture credit score: Seagate)

There have been a number of the explanation why Seagate’s shipments dropped and the corporate’s monetary scenario modified drastically within the first quarter of its FY2023. First, COVID lockdowns in China precipitated an financial slowdown, which lowered demand for Seagate’s merchandise. Second, as a consequence of slowing financial progress, Seagate’s clients initiated stock changes, which additional lowered the corporate’s gross sales. Third, as a consequence of decelerating financial system and elevated logistics prices, CSPs started to ship laborious drives and different on boats (versus planes), which slowed down their procurement cycle. Lastly, customers minimize down their spending amid inflation and geopolitical uncertainties.  

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