Seagate Technology PLC (NASDAQ:STX) shares were up 6.30% to $23.95 on Wednesday but retreated 0.46% in after-hours trading as the company shared its restructuring plan. The company has a market cap of $7.72 billion at 298.48 million shares outstanding. Shares have been trading in a 52-week range of $18.42 to $54.50.
With its restructuring plan, Seagate Technology plans on cutting 1,600 positions or 3% of its global workforce. This is expected to contribute $100 million in annual savings for the company, impacting cost revenue by $48 million and reducing operating expenses by $52 million. The plan is expected to take effect in September this year and could amount to total pretax charges of $62 million in costs related to employee termination.
Seagate Technology aims to reduce its cost structure amid a challenging period for data-storage companies. The company saw a 22% decline in revenue and an overall loss for the latest reporting period as cloud solutions have been on the rise. Firms in the same industry such as Western Digital Corp have also reported weaker revenues for the period. Apart from that, the company’s spinning magnetic disk technology is being replaced by storage based on semiconductors.
In its latest reporting period, the company reported earnings per share of $0.22, short of the estimate at $0.37. Revenue came in at $2.59 billion versus the estimate at $2.6 billion. Its next set of earnings figures are due on July 20.
Seagate Technology is a provider of electronic data storage products, with its main offerings consisting of hard disk drives, solid state hybrid drives, solid state drives, and peripheral component interconnect express cards, and SATA controllers. Its products are designed for enterprise servers and storage systems for applications, client compute applications and client non-compute applications. Also, the company has a product and solution portfolio for the enterprise data storage industry which includes storage enclosures, integrated application platforms and high performance computing data storage solutions.
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