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Despite positive Q4 results, hard drive maker Seagate announces 6500 job cuts

By midian182 ยท 18 replies
Jul 12, 2016
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  1. Data storage firm Seagate has released preliminary financial results for the fourth quarter of 2016, and while the stronger than expected forecast will be welcomed by the company, there's some bad news for its employees.

    Seagate said demand for its range of hard drives was higher than anticipated, resulting in a projected fourth quarter revenue of $2.65 billion with gross margins of 25 percent. The company had predicted a Q4 revenue of $2.3 billion and non-GAAP margins of 23 percent.

    Regarding the report, CEO Steve Luczo said: “The evolution of mobile and cloud data driven environments continues to define itself as requiring significant amounts of mass storage. HDD devices are where most data bits ultimately reside and our record HDD exabyte shipments in the June quarter, particularly due to enterprise demand, continue to support this thesis.”

    However, the industry shift toward flash storage and cloud solutions, coupled with slumping PC sales, is a concern for Seagate. As such, the company is looking to make savings by consolidating its Asia, EMEA, and Americas footprint.

    Essentially, this means a second round of job cuts will take place; 14 percent of its workforce – 6500 people – are to be laid off. It was only a few weeks ago when Seagate announced that its streamlining plans would result in 1600 employees being terminated.

    According to the Wall Street Journal, most of the job losses will come from manufacturing operations. While these are mainly located in Malaysia and China, the company also manufactures in the US and the UK.

    The restructuring plans will cost Seagate $164 million in pretax charges. The announcement caused Seagate's shares to jump 13 percent in after-hours trading yesterday.

    Permalink to story.

  2. alabama man

    alabama man TS Guru Posts: 563   +355

    "coupled with slumping PC sales," People buy parts as much as ever, only market PCs sell less. Most people avoid seagate but they put these in consoles and crappy laptops to save money. PS neo and xbone mk2 will probably have crappy seagates (as all their predecessors did) and should give additional time for seagate to innovate something else to make crappily and sell cheap in bulk for manufacturers.
  3. VitalyT

    VitalyT Russ-Puss Posts: 4,478   +3,035

    On a positive note though.... you are all fired!
    wastedkill likes this.
  4. risc32

    risc32 TS Addict Posts: 209   +96

    Harddriver... I like it.
  5. Uncle Al

    Uncle Al TS Evangelist Posts: 5,389   +3,776

    Seagate has made some improvements in quality but a well experienced CEO should know that you don't cut stuff in the middle of a product improvement phase, it not only sends the wrong signal to buyers, it shakes up the staff causing them to be more concerned about their own stability than the focus on product improvement. Bad move and bad timing = more slumping sales.
    bmw95 and wastedkill like this.
  6. wastedkill

    wastedkill TS Evangelist Posts: 1,423   +350

    Seagate has been improving for years now, they recently a few months ago pushed WD behind them in terms of hard drive failures so currently Seagate are more reliable than WD.
  7. hood6558

    hood6558 TS Evangelist Posts: 353   +110

    I must have missed that article - where did you read this?
  8. mbrowne5061

    mbrowne5061 TS Evangelist Posts: 1,209   +669

    Yeah, what he said. I want to see the source on this one.
    Last I read HGST (formerly Hitachi, now owned by WD) is still king of reliability in mechanical drives.
    bmw95 likes this.
  9. yRaz

    yRaz Nigerian Prince Posts: 2,891   +2,216

    Those poor executives, I'm sure a third Ferrari means better harddrives for all of us!

    I haven't bought a seagate harddrive in years and this seals the fact that I wont be buying one again.
  10. Jack007

    Jack007 TS Booster Posts: 187   +44

    Looks like some of the sections in manufactoring would be automated with robots now. And a shift to flash memory storage manufacturing doesnt require soo many people.
    MoeJoe likes this.
  11. SalaSSin

    SalaSSin TS Booster Posts: 160   +83

    I love it...
    Step1. How could we get more cash from investors?
    Step2. I know! Fire people!
    Step3. Profit.
    MoeJoe likes this.
  12. MoeJoe

    MoeJoe Banned Posts: 837   +441

    Seagate goes through cycles. It's fact and it's history that repeats itself.
    Millennials should research and study that.

    Overgrown, bloated and inefficient organizations that under perform = junk quality and lost revenue potential.
    The easiest fix is to whack the ranks until the next big boom cycle.

    The problem is, that next big boom cycle isn't in the cards for rotating media.
  13. captaincranky

    captaincranky TechSpot Addict Posts: 14,945   +3,993

    You know, in the antiquated dialect of English which I speak,"they recently a few months ago pushed WD behind them in terms of hard drive failures", which would actually mean, "Seagate drives fail more often than WD's".

    If the stats are accurate regarding Seagate 3TB failures, you got it right! (y)It's just such a pity you're so blissfully unaware of it....:D
    psycros likes this.
  14. wastedkill

    wastedkill TS Evangelist Posts: 1,423   +350

    I'm guessing you're blissfully unaware of a company called backblaze, massive data center, thousands of hard drives, 24/7 operation, tons of data to backup my "claims".

    Just google it I'm sure you'll find a wealth of information you've blissfully missed.
  15. wastedkill

    wastedkill TS Evangelist Posts: 1,423   +350

  16. mbrowne5061

    mbrowne5061 TS Evangelist Posts: 1,209   +669

    ... your link disproves your own point. It shows that Seagate drives may not fail out of the box, but fail after 2-3 years. WD on the other hand, has relatively 'consistent' failure rates.They're still higher than I like, but still lower than Seagate after a year. I don't know about you, but I keep my drives for 5-7 years - and I would rather my drive fail early, while it is under warranty and before I've loaded a ton of data on it.
    MoeJoe likes this.
  17. captaincranky

    captaincranky TechSpot Addict Posts: 14,945   +3,993

    Not really. I've been here for 10 years and the latest "Backblaze" report certainly isn't the last we'll see, nor the first which was published here at Techspot.

    I don't want to leap to conclusions, or thrown up any FUD, but IIRC, the Seagates BB was reviewing were the newest in their systems.

    Second, but perhaps more importantly, are the consumer reviews at Newegg. The Seagate 3TB drive has about a 2 star rating (*), and a slew of customers railing how, "I'll never buy a Seagate again".

    Couple that with the fact Seagate's 3TB unit, doesn't seem to fetch much in the retail market, while Black WD's offerings are still pricey by comparison. Now, the Seagate "Constellation" line is still above what I'm wiling, (or perhaps able), to pay. Perhaps they are wonderful, long lasting units. You should buy a few!

    Anyway, how about if we shelve the "HDD longevity" debate, and concentrate on you learning to read and write, an accurate, readable, coherent version of English. (This had been my point all along). But look, thus far you've even learned a new word to insert into your posting prose, "blissfully". So we're on our way, at least in that respect.

    Here's the link to the Seagate standard desktop 3TB drive: http://www.newegg.com/Product/Product.aspx?Item=9SIA2W01HP4645 Pay particular attention to the customer reviews, 36% of which are 1 star.. These 1 star reviews are pitiable conclusions, which unfortunately,y seem to repeat themselves more often with Seagate's drives, than with WD's!

    I'm going to suggest a more syntactically correct alternative to your "pseudo report". Whether or not your observations were correct, is a moot point.

    "Seagate has worked itself back into the forefront of mechanical drive reliability. In fact, they have surged ahead of their biggest rival, Western Digital, in terms of more affordable, and more reliable offerings, across the full spectrum of home PC needs".

    It's 3 stars, but just barely.

    EPILOGUE: I've been very fortunate in not ever receiving a dead HDD from either maker, nor have I had one fail in service.

    I can say, the HDD in my 12 year old (!) "eMachines", a 160GB WD Blue, has been, and still is, chugging away, quite merrily. (Yes, it's used heavily, and daily).

    I honestly don't know if that is sufficient to engender a comprehensive faith in their current product, but it certainly doesn't hurt. Although, it does make one long for, "the good old days", when I was 12 years newer as well...:D
    Last edited: Jul 13, 2016
  18. wastedkill

    wastedkill TS Evangelist Posts: 1,423   +350

    Thanks for pointing out my lack of an oxford degree captaincranky, I'm guessing your an oxford student yourself? or maybe even a professor with the amount of knowledge and respect you have for technology and people in general.

    I'll admit the 3TB drives were a colossal failure but, I find Seagate drives to be perfectly fine I've never had one fail within 4-5 years of 24/7 operation and I do have quite a few 2TB models (16).

    I do prefer WD drives due to better support and the specific drive models like NAS, Surveillance far better than Seagates offerings but price/longevity to be perfectly fine considering all the anti-seagate people. I prefer cheap drives due to my financing
  19. captaincranky

    captaincranky TechSpot Addict Posts: 14,945   +3,993

    You're welcome! (I could and should go on about that, but I mercifully won't). Just keep in mind Firefox's spell checker can make an English major out of practically anyone. (y)

    This isn't the 1st drive "bricking scandal" which Seagate has generated. Their larger drives had a fair amount of serial # sequences which died a few years back, and (IIRC) their firmware update for the issue, bricked a fair amount of drives whose numbers weren't on the list. (Yes I know, "pilot error" stuff does happen). So, the uncertainty about Seagate reliability has been brewing, and the 3TB "debacle" in no way helped.

    AFAIK, WD has never generated that amount of negative publicity

    I'm far from "anti-Seagate", I grab whatever is on sale, as long as it's not over 2TB.

    Indulge me in a reminiscence about the days of smaller drives, if you would. Again IIRC, (and from my own experience), Seagate's 320GB single platter offering was, faster, lighter, quieter, and cooler, than its WD counterpart. Those were the good old dayz. ;)
    wastedkill likes this.

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