Seagate Technology Holdings plc (STX - Free Report) recently announced another round of layoffs which will affect about 1% of its total headcount or about 480 employees. The new restructuring is expected to be considerably completed by the end of the fourth-quarter fiscal 2023.
This particular action will cost Seagate total pre-tax charges between $55 million and $65 million. This includes cash expenditures between $25 million and $30 million for employee termination costs, and other related exit costs between $5 million and $10 million, along with non-cash charges of nearly $25 million.
Seagate noted that the layoffs will be executed across multiple functions and geographic locations. There will also be some workforce trimming in the company’s Lyve Edge-to-Cloud Mass Storage Platform business unit to reduce Lyve Cloud investment levels in the near-term.
Seagate expects additional restructuring to add further cost savings and help it to deal effectively with the existing weak macroeconomic environment. From the beginning of fourth-quarter fiscal 2023, the company expects to generate annualized savings from this expanded restructuring plan in the range of $40-$45 million.
In October 2022, the company had announced a restructuring plan to reduce the global workforce by 8% or approximately 3,000 employees, along with other cost-saving initiatives.
Global macroeconomic weakness and inventory adjustments by customers is affecting Seagate’s performance. As a result, the company's hard disk drive (HDD) and non-HDD segments witnessed significant declines in the last reported quarter, with HDD exabyte shipment declining 31%.
Also, the economic slowdown related to COVID-19 in China, along with work down for nearline HDD inventories among domestic cloud and global enterprise clients, significantly affected mass-capacity demand.
However, the company is likely to benefit from its extensive cost-cutting initiatives to better align with changing market conditions and support the company’s long-term business strategy. Also, the company expects secular trends and innovations in driving up aerial density to benefit mass capacity storage.
At present, Seagate carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the broader technology space are Arista Networks (ANET - Free Report) , Perion Network (PERI - Free Report) and Pegasystems (PEGA - Free Report) , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 14.2%. Shares of ANET have increased 17% in the past year.
The Zacks Consensus Estimate for Perion’s 2023 earnings is pegged at $2.69 per share, rising 16% in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
Perion’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 31.7%. Shares of PERI have increased 71.6% in the past year.
The Zacks Consensus Estimate for Pegasystems’ 2023 earnings is pegged at $1.35 per share, rising 66.7% in the past 60 days.
Pegasystems’ earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average surprise being 11.2%. Shares of the company have declined 43% in the past year.
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Seagate Technology Holdings plc (STX - Free Report) recently announced another round of layoffs which will affect about 1% of its total headcount or about 480 employees. The new restructuring is expected to be considerably completed by the end of the fourth-quarter fiscal 2023.
This particular action will cost Seagate total pre-tax charges between $55 million and $65 million. This includes cash expenditures between $25 million and $30 million for employee termination costs, and other related exit costs between $5 million and $10 million, along with non-cash charges of nearly $25 million.
Seagate noted that the layoffs will be executed across multiple functions and geographic locations. There will also be some workforce trimming in the company’s Lyve Edge-to-Cloud Mass Storage Platform business unit to reduce Lyve Cloud investment levels in the near-term.
Seagate expects additional restructuring to add further cost savings and help it to deal effectively with the existing weak macroeconomic environment. From the beginning of fourth-quarter fiscal 2023, the company expects to generate annualized savings from this expanded restructuring plan in the range of $40-$45 million.
In October 2022, the company had announced a restructuring plan to reduce the global workforce by 8% or approximately 3,000 employees, along with other cost-saving initiatives.
Global macroeconomic weakness and inventory adjustments by customers is affecting Seagate’s performance. As a result, the company's hard disk drive (HDD) and non-HDD segments witnessed significant declines in the last reported quarter, with HDD exabyte shipment declining 31%.
Also, the economic slowdown related to COVID-19 in China, along with work down for nearline HDD inventories among domestic cloud and global enterprise clients, significantly affected mass-capacity demand.
However, the company is likely to benefit from its extensive cost-cutting initiatives to better align with changing market conditions and support the company’s long-term business strategy. Also, the company expects secular trends and innovations in driving up aerial density to benefit mass capacity storage.
At present, Seagate carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the broader technology space are Arista Networks (ANET - Free Report) , Perion Network (PERI - Free Report) and Pegasystems (PEGA - Free Report) , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks’ 2023 earnings is pegged at $5.79 per share, rising 10.9% in the past 60 days. The long-term earnings growth rate is anticipated to be 14.2%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 14.2%. Shares of ANET have increased 17% in the past year.
The Zacks Consensus Estimate for Perion’s 2023 earnings is pegged at $2.69 per share, rising 16% in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
Perion’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 31.7%. Shares of PERI have increased 71.6% in the past year.
The Zacks Consensus Estimate for Pegasystems’ 2023 earnings is pegged at $1.35 per share, rising 66.7% in the past 60 days.
Pegasystems’ earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average surprise being 11.2%. Shares of the company have declined 43% in the past year.
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Zacks Investment Research has released a Special Report to help you pursue massive profits from the world’s first and largest decentralized form of money.
No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%.
Zacks predicts another significant surge. Click below for Bitcoin: A Tumultuous Yet Resilient History.
Download Now – Today It’s FREE >>
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