Seagate Eliminates 3,000 Jobs Amid Slowing Tech Demand
Seagate Technology is cutting 3,000 jobs as global economic uncertainties and inventory corrections reduce demand for computer hard drives. The company also faces US allegations of illegally selling drives to sanctioned Chinese telecom giant Huawei.
Seagate Technology Holdings Plc eliminates about 3,000 jobs as part of a restructuring plan designed to reduce costs in the face of slowing demand. The world's largest maker of computer hard drives takes this decisive step after major technology buyers cut their orders due to worsening economic conditions and broad customer inventory corrections.
Alongside the workforce reduction, Seagate deals with a serious legal challenge from the US Commerce Department, which accuses the company of violating export rules by selling hard drives to Huawei Technologies Co. Seagate firmly denies these allegations, arguing that its hard disk drives do not fall subject to the Export Administration Regulations, setting up a potential test of the Biden administration's tightening technology restrictions against China.
The company's fiscal first-quarter financial results reflect these difficult market dynamics, with sales falling to $2.04 billion and missing the average analyst estimate of $2.12 billion. Chief Executive Officer Dave Mosley notes that Seagate adjusts its production output and annual capital expenditure plans to navigate the near-term industry weakness while attempting to enhance long-term profitability.