Despite beating its own financial expectations, Seagate will lay off 6,500 employees

The company's 8TB hard disk

Seagate, one of the largest hard disk manufacturers in the world, is cutting 6,500 jobs globally. The company announced this yesterday, only two weeks after saying it would be cutting 1,600 positions.

In its preliminary financial postings for the 4th quarter of its 2016 fiscal year, Seagate announced better than expected results but also stated that it would be enacting a new restructuring plan, one that aims to cut 6,500 jobs by the end of FY 2017. That’s around 14% of the company’s workforce, and according to the company, the cuts will mostly be in the manufacturing sector.

Seagate has been struggling to keep up with changing global demand for hard disks as industries and consumer shift usage patterns, turning to solid-state drives. However, that hasn’t stopped Seagate from shipping 37 million hard disks over the past quarter, while maintaining a robust 25% gross profit margin. The company projects $2.65 billion in revenue for the quarter, beating its own previous estimates.

Still, Seagate says that long-term macroeconomic factors are becoming strong headwinds for the company’s future and that the restructuring is a painful but necessary move to ensure the company’s continued success.

Seagate’s share price surged 13% in after-hours trading.

Source: Seagate Via: Wall Street Journal

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