Seagate Technology (STX) Plans 3% Workforce Reduction; Sees Charges

Seagate Technology (NASDAQ: STX) disclosed the following on Wednesday:

Item 2.05 Costs Associated with Exit or Disposal Activities.

On June 27, 2016, Seagate Technology plc (the “Company”) committed to a restructuring plan (the “Plan”) as part of the Company’s previously announced efforts to reduce its cost structure. The Plan includes reducing the Company’s global headcount by approximately 1,600 employees or 3% of its global headcount. The Plan, which the Company expects to essentially complete by the end of the September 2016 quarter, is expected to result in total pretax charges of $62 million recorded primarily in the fiscal fourth quarter of 2016. These charges will consist primarily of employee termination costs generating cash outlays in the September 2016 quarter. The savings generated from these restructuring activities are expected to be recognized beginning in the September 2016 quarter and will represent approximately $100 million in savings on an annual run rate basis, impacting cost of revenue and operating expenses favorably by approximately $48 million and $52 million, respectively.

Information regarding additional phases of the Company’s global footprint consolidation and restructuring plan will be provided as specific actions are formalized.

You May Also Be Interested In

• Cadence (CDNS) tumbles despite Q1 beat on top and bottom lines
• Seagate Technology (STX) April 84 straddle into quarter results
• Capri Holdings Limited (CPRI) Statement on FTC Action Seeking over Tapestry Deal