Seagate defrags 14% of workforce: 6,500 axed

Brings the number of staff facing unemployment to more than 8,000 in a couple of weeks

Seagate is cutting 6,500 staff, or 14 per cent of its 46,000-strong workforce, across Asia, Europe, the Middle East and the Americas.

Those losing their jobs will shown the door over the next 12 months; the redundancies will cost the hard drive maker US$164m. These layoffs are on top of the 1,600 heads put at risk at the end of last month.

Essentially, Seagate blames the dwindling desktop PC market on falling disk sales. Everyone's either storing information on flash chips in handhelds and laptops, or on flash and disk in the cloud – not on or under desks. CEO Steve Luczo tried to keep investors happy by stressing that there is still a need, nay, a growing demand for spinning platters in this day and age.

"The evolution of mobile and cloud data driven environments continues to define itself as requiring significant amounts of mass storage," said Luczo in a statement.

"We believe the long-term trend of exabyte storage demand growth exceeding [hard disk drive] areal density growth remains intact for the foreseeable future."

Seagate reckons it has banked $2.65bn in revenue – with a gross margin of 25 per cent – in the past three months, and will publish its full financial figures for the year to July 1 on Tuesday, August 2. Check in with El Reg tomorrow for analysis on Seagate's situation by our storage editor, Chris Mellor. ®


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