Seagate ups Q4 outlook, cites hard drive sales, cuts another 6,500 jobs
Seagate's fourth quarter will be stronger-than-expected, but the company is going to cut another 6,500 jobs, or 14 percent of its workforce, as it consolidates its global operations.
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The storage vendor said that it will deliver fourth quarter revenue of $2.65 billion with gross margins of 25 percent. Why?
Traditional hard drives are selling well despite all the talk about all-flash storage in the enterprise.
Seagate had projected fourth quarter revenue of $2.3 billion and non-GAAP margins of 23 percent. The company said margins were helped by cutting costs and revenue was driven by its enterprise hard drive lineup.
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.
Nevertheless, Seagate is cutting jobs. The company said it is consolidating its EMEA, Asia and Americas footprint. The restructuring will be complete at the end of fiscal 2017.
Previously: Seagate to cut 1,600 jobs amid weak demand