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Seagate Announces Big Job Cuts

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A logo sign outside of a facility occupied by Seagate Technology in Fremont, California on January 23, 2016. Photograph by Kristoffer Tripplaar — AP

(Reuters) – Seagate Technology estimated fourth-quarter revenue higher than Wall Street expectations, helped by strong demand for hard-disk drives.

The company estimated revenue of about $2.65 billion for the quarter ended July 1, above analysts’ expectations of $2.33 billion.

Shares of Seagate (STX), whose estimate is also higher than its previous forecast of $2.3 billion, were up 8.8% in after-hours trading.

The company also said it would cut about 6,500 jobs, or 14% of its global workforce, by the end of fiscal 2017.

The total pretax charges for the restructuring plan will be about $164 million in the current fiscal year, the company said on Monday.

Seagate, which has more than 52,000 employees worldwide, said in June that it would cut 1,600 jobs as the company looks to rein in costs amid waning demand.

The company also said it expects adjusted gross margin of about 25.8% for the fourth quarter, up from its previous estimate of about 23%.

According to research firm International Data Corp, worldwide PC shipments fell 4.5% to 62.4 million in the second quarter. IDC had expected a fall of 7.4%.

Seagate will report is fourth-quarter results on Aug. 2.