The cuts were announced alongside Seagate’s preliminary financial results for the fourth quarter of its 2016 fiscal year.
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Together with sharing preliminary guidance for 2016’s fiscal fourth quarter that was higher than earlier anticipates, thanks to improved-than-predictable hard disk drive sales and a couple of analyst upgrades, these recent cost-cutting moves pushed Seagate’s stock price up nearly 22% on the day.
In Monday’s announcement, Seagate upgraded its estimated revenue for the quarter that ended July 1 to $2.65 billion, from a forecast of $2.3 billion. It expects higher revenues and margins in the quarter due to greater demand for the company’s HDD products and cost cutting initiatives.
STORAGE OUTFIT Seagate has announced plans to axe 6,500 jobs worldwide just two weeks after saying that 1,600 jobs would go. The most recent quarterly Gartner report indicated that desktop PCs declined 5.2 percent globally, but actually grew by 1.4 percent in the U.S. “Seagate will continue to evolve its product offering, technology investment and manufacturing footprint to best serve our customers”.
The company said late Monday that the job cuts were part of a restructuring plan that would consolidate Seagate’s global presence across Asia, Europe, the Middle East, Africa and the Americas. IFP Advisors Inc now owns 11,356 shares of the data storage provider’s stock valued at $391,000 after buying an additional 4,932 shares during the period.
Following the announcement, the company’s shares surged almost 13% in after-hours trading.
Seagate’s most recent quarterly report showed a $21 million loss for the quarter ended April 1, after the company brought in $291 million in income for that period previous year.
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The Chairman and CEO of Seagate, Steve Luczo revealed that there are strong indications that HDD areal density growth will be exceeded by Exabyte storage demand growth which will remain as a long-term trend in the foreseeable future. The company has a market cap of $7.28 billion and the numbers of outstanding shares have been calculated to be 298.48 million shares.
