Seagate intends to eliminate eight percent of its headcount or around 3,000 people.

The hard drive maker is the latest company to cite economic uncertainties and falling demand for its products as reasons for its move.

Seagate stated the restructuring plan, which includes job cuts, will save the corporation around $110 million annually.

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The layoffs would be finalized by the conclusion of the company’s March quarter.

CEO Dave Mosley said: “In addition to adjusting our production output, to drive supply discipline and pricing stability, we are implementing a restructuring plan to sustainably lower costs, including reduction in our global workforce.”

The broad restructuring was unveiled after Seagate posted fiscal first-quarter earnings that fell short of Wall Street’s revenue and earnings per share estimates.

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Mosley said Seagate’s clients, which include cloud providers, are stockpiling components since they are spending less on computers.

He added that he does not expect Seagate’s customers to utilize their parts backlogs in the current quarter.

The data storage company will continue to pay a dividend.

READ MORE: PHILIPS TO CUT 4,000 JOBS AFTER MASSIVE PRODUCT RECALL AND SALES SLUMP

Seagate manufactures hard drives and other components that are often used in PCs and cloud servers.

The downsizing at Seagate is the latest indication demand for PCs and cloud servers is waning following two boom years fueled by the coronavirus outbreak.

Microsoft, which makes the operating system for the majority of PCs, said last week Windows licensing sales were down 15 percent year on year.

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Microsoft’s cloud business is also below expectations.

Intel intends to slash thousands of jobs, whereas Meta wants to reorganize teams and reduce manpower for the first time ever.

It stated that it expects to pay around $65 million in pretax expenses, mostly for severance and other termination benefits.

Source: CNBC

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