Seagate Cutting 3,000 Jobs, Citing 'Customer Inventory Corrections'

Seagate is cutting 8% of its workforce -- some 3,000 employees worldwide -- after Q1 FY ’23 revenue plummeted 35% year-on-year to $2.04 billion, the company said Wednesday. Net income shrank to $29 million from $526 million in the year-ago quarter, and operating margin narrowed to 5.3% from 18.8% for the quarter ended Sept. 30. CEO Dave Mosley cited “customer inventory corrections” late in the quarter that reflect “near-term industry demand” for disk drives. The company expects cost cuts to result in $110 million in annualized savings beginning in fiscal Q3. Guidance for Q2 FY ’23 is revenue of $1.85 billion, “plus or minus $150 million.” Shares fell 7.9% Wednesday to close at $53.39. The Bureau of Industry and Security recently sent a proposed charging letter to Seagate Technology alleging it violated U.S. export controls by providing controlled items to a company on the Entity List. Seagate said it received the letter from BIS Aug. 29, accusing the U.S. company of violating the Export Administration Regulations by providing hard disk drives to the blacklisted company and its affiliates between August 2020 and September 2021. Seagate told BIS it didn’t violate U.S. export controls because the hard disks aren’t subject to the EAR, the company said in an SEC filing Wednesday. “Seagate believes it has complied with all relevant export control laws and regulations,” the company said.