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Seagate laying off 2,217 employees
Closing China's disk drive manufacturing plant
Reuters reports Seagate is closing its Suzhou disk drive manufacturing plant in China, shedding a whopping 2,217 jobs.
The 1.1 million ft2 plant was formerly owned by Maxtor; Seagate having bought Maxtor for $1.9bn in May, 2006. Stifel MD Aaron Rakers puts the closure in the context of Seagate wanting to lower its quarterly cost base, given the overall decline in disk drive sales.
He writes: “Seagate exited F1Q17 with 44,455 total employees and we would note that the company’s average annualised operating expense per average employee has stood at ~$35-40k over the past four quarters, which would leave us to conservatively estimate a $20m per quarter savings from the Suzhou-related headcount reduction.” ®