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Seagate (STX) Further Slashes Workforce to Boost Cost Savings
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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.
Seagate Technology Holdings PLC Price and Consensus
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).
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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Seagate (STX) Further Slashes Workforce to Boost Cost Savings
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.
Seagate Technology Holdings PLC Price and Consensus
Seagate Technology Holdings PLC price-consensus-chart | Seagate Technology Holdings PLC Quote
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.