Layoffs and Management Shuffles Plague Seagate After Rough Earnings
Seagate Technology just had a rough day.
Along with the PC market, the company”s business of selling the hard drives that accompany personal computers has continued to decline. The hard-disk drive maker reported sales of $2.4 billion in its latest quarter, a 9% drop from the $2.65 billion it brought in during the same period last year.
Additionally, the company reported earnings per share of 65 cents for its fourth quarter, down significantly from the 98 cents per share that Wall Street analysts were expecting.
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Here are three bad items to happen to Seagate (STX) today:
Layoffs are coming
To reduce costs, Seagate said it would lay off 600 employees, which could save the company about $90 million. This is a continuation of a trend. Last July, Seagate said it would lay off 6,500 workers over 2016.
Long-time CEO is stepping down
Seagate CEO Steve Luczo said he would step down from his position on Oct. 1, when he becomes the company’s executive chairman “in order to focus on longer-term shareholder value creation,” according to the company.
Seagate’s president and chief operating officer Dave Mosley will replace Luczo as CEO.
“It has been an honor and a privilege for me to have served as Seagate’s CEO in 16 of the last 20 years,” Luczo said in a statement. “I am excited about our future and I look forward to working with Dave in my new role as executive chairman at Seagate.”
Seagate’s stock tanked on Tuesday
Wall Street didn’t respond well to the company’s quarterly report. Seagate shares dropped 16.50% by the market’s close to $33.20. Shares were down a little less than 1% in after-hours trading to $33.10.