As part of its global business restructuring plan, the world's largest hard disk producer Seagate recently announced plans to close its factory in Suzhou, China, to optimize operational efficiency due to subdued market demand.
The company will also trim more than 2,000 jobs as part of the shutdown from its 6,500 employees globally, according to a Sina news report on Monday.
The latest move is in line with Seagate's measures to continue to reduce global manufacturing scale, the company told Chinese media, adding that the cost-cutting plan has been initiated globally since July 2016.
The dissolving plan will leave Seagate only two vertically integrated hard disk driver (HDD) production plants in the world, one in Wuxi, China, and the other in Thailand.
Seagate's retreat from China is also a result of rising labor costs in the country, and the company has announced plans to expand its manufacturing plants in Thailand, where salaries of local skilled workers are lower than in China.
Seagate's HDD business continues to deteriorate as global PC shipments have come under severe downward pressure. Total import and export values of Seagate's Suzhou plant stood at $1.2 billion in 2016, down 37.5 percent from $1.92 billion a year earlier, showed another Chinese report.
In 2015, a Reuters report said the US company planned to invest about $470 million in Thailand over the following five years to expand production capacity at its largest facility in the country.