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Seagate Fires 6,500, Or 14% of Workforce, Stock Soars (zerohedge.com) 224

Posted by BeauHD from the restructuring-activities dept.
turkeydance quotes a report from Zero Hedge: [Seagate] announced today an additional restructuring plan for continued consolidation of its global footprint across Asia, EMEA and the Americas. The plan includes reducing the Company's global headcount by approximately 6,500 employees, or 14% of its global headcount by the end of fiscal year 2017. The total pretax charges for the plan will be approximately $164 million in fiscal year 2017. The restructuring activities and global footprint consolidation underway should enable the Company to be operating within its targeted Non-GAAP product gross margin range of 27-32% by the December 2016 quarter. "Computer-memory specialist Seagate announced that its Q4 revenue would be $2.65 billion, beating expectations of $2.34 billion, and up from the $2.3 billion guidance given previously," reports Zero Hedge. "The company also reported gross margin of 25% and non-GAAP gross margin of approximately 25.8% for the fiscal fourth quarter 2016, up from the previous 23% forecast. Good news, and the stock is up 12% after hours as a result."
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Seagate Fires 6,500, Or 14% of Workforce, Stock Soars More

Seagate Fires 6,500, Or 14% of Workforce, Stock Soars

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  • Lay them all off! (Score:5, Funny)

    by youngone ( 975102 ) on Monday July 11, 2016 @08:28PM (#52493597)
    Get rid of 100% of the workforce. Just think what that will do for the share price.

    • Don't give them ideas. [debate.org]

    • Re: (Score:3)

      by JustOK ( 667959 )
      C'mon, give 110% for the TEAM if you really want to win.

      • Re:Lay them all off! (Score:5, Funny)

        by HornWumpus ( 783565 ) on Monday July 11, 2016 @08:48PM (#52493729)

        110% = 25% (mon-thur) + 10% (fri)

      • Obstetrician 1: Get the EEG, the BP monitor, and the AVV.
        Obstetrician 2: And get the machine that goes 'ping!'.
        Obstetrician 1: And get the most expensive machine - in case the Administrator comes.
        Patient: What do I do?
        Obstetrician: Nothing, dear, you're not qualified.
        Hospital Administrator: Ah, I see you have the machine that goes 'ping!'. This is my favourite. You see, we lease this back from the company we sold it to - that way it comes under the monthly current budget and not the capital account.
        [The doc

    • Re: (Score:3, Funny)

      by DNS-and-BIND ( 461968 )
      Better yet, forbid layoffs. This ensures jobs will always be available and in no way will ever backfire. Then, since the corrupt corporate executives will always try to get around your laws, replace them with pro-government supporters. This will ensure the company will continue prosperity well into the future and will not at all result in your country turning into Venezuela. Nope, never happen.

    • Re:Lay them all off! (Score:4, Interesting)

      by JoeMerchant ( 803320 ) on Monday July 11, 2016 @09:51PM (#52494045)

      I worked for a company that did this - stock took a 50% bounce up.

      The market doesn't appreciate employees - employees are an expense, the market cares about results and seems to think that an empty building is more likely to get profitable results than one filled with people working toward a purpose.

      • I worked for a company that did this - stock took a 50% bounce up.

        The market doesn't appreciate employees - employees are an expense, the market cares about results and seems to think that an empty building is more likely to get profitable results than one filled with people working toward a purpose.

        If empty buildings is what the market cares about, then the "market" gets what it deserves in the end.

        One would think we learned a financial lesson from the dot-bomb era of vaporware-infused business ideas.

        • I worked for a company that did this - stock took a 50% bounce up.

          The market doesn't appreciate employees - employees are an expense, the market cares about results and seems to think that an empty building is more likely to get profitable results than one filled with people working toward a purpose.

          If empty buildings is what the market cares about, then the "market" gets what it deserves in the end.

          One would think we learned a financial lesson from the dot-bomb era of vaporware-infused business ideas.

          I'd like to think that the market gets what it deserves, but since banks quit paying interest, the only way to keep your cash savings "current" with inflation is to invest them in the market, and the market is driven by a bunch of dumb statistics like P/E ratio, etc. Having every single person in the world investigate their investment options is neither efficient, nor a good use of resources (time), and yet, the persons who stand up and say they'll do that for you (fund managers) just look at dumb statisti

      • Well I, for one, don't want 50% of the hard drive cost to be covering the wage of idlers sitting around the office doing nothing. If you don't need them, why are you paying them? Scratch that; I'm the one buying the hard disk, so why am *I* paying them?

        • Re: (Score:2)

          by dbIII ( 701233 )

          why are you paying them?

          Some hopefully would have been working on new models so not vital to production any time time in the next few months. Maintaining stuff - probably won't need those guys this week. With zero plans for the future it's amazing how many people seagull managers can do without so long as they are quick packing their bags to leave for the next gig before it's suddenly found that all the people who used to deal with various problems that crop up have been fired.

          • Seagate has its own manufactories too, doesn't it? They produce their own hard drives. Maybe they retooled and have better equipment that doesn't need as much babysitting.

          • Re: (Score:2)

            by gmack ( 197796 )

            why are you paying them?

            Some hopefully would have been working on new models so not vital to production any time time in the next few months. Maintaining stuff - probably won't need those guys this week. With zero plans for the future it's amazing how many people seagull managers can do without so long as they are quick packing their bags to leave for the next gig before it's suddenly found that all the people who used to deal with various problems that crop up have been fired.

            Sometimes it's not management's fault.

            The problem in this case is that spinning drives are losing ground to flash and are a declining business. The "Performance drives" part of the drive market is already losing money for pretty much everyone leaving only the bulk storage part of the market still making money. I suspect that over the next while, we will see fewer updates on the performance drives while the drive makers concentrate on the larger/slower "NAS" drives until at some point, there aren't enough

    • I had heard that Seagate had MTBF problems.
      I didn't realize that meant "Mean Time Between Firings".

  • Good news! (Score:5, Insightful)

    by Scutter ( 18425 ) on Monday July 11, 2016 @08:32PM (#52493625) Journal

    "Good news, and the stock is up 12% after hours as a result."

    Well...good news except for the 6500 people you just fired. But as long as you got paid, that's all that matters, eh, Mr Investor?

    • I have worked in a number of tech companies where engineering is considered a hindrance to "company progress." It's just amazing. I can't believe that so many tech companies stay in business for so long. Obviously, Seagate is not long for this world.

      • Re: (Score:2, Funny)

        by Anonymous Coward

        >engineering is considered a hindrance to "company progress."
        sure, engineers kept pointing out that the hard drive sizes were being advertised incorrectly.

      • Can you point me to an article that states it was engineers that were fired? Production operations I can understand given the decline in PC sales.
        • I have no idea - my comment was on places other than Seagate where I've worked. But wouldn't Seagate mostly be engineering types?
          • I just don't know. I don't really know how their production is done. I assume it is at some level outsourced to China or some such indentured servant type market, but there would have to be significant oversight. In any case, a company with that many employees can't help but be impacted by the kind of sales slow downs hitting the market right now. It could be support, marketing, management, etc... I also believe that the transition to SSDs which can be built with much more automation, and requires much
    • Certainly seems as if the market considers it the right move w.r.t. the success of Seagate, Inc. If you disagree, and feel Seagate should have retained those 6500 employees, why should that be the steady state? Couldn't Seagate afford to take on additional employees? What should factor into Seagate management's calculus when they try to determine what the size of their workforce should be? As large as possible with the constraint that the company remain profitable? Whatever size maximizes long-term gro

      • Re: (Score:2)

        by AmiMoJo ( 196126 )

        Maybe your employer should offer the bottom 15% some training to improve their skills, rather than just discard them? Because, you know, they are human beings.

        • "They" (meaning employees where I work) frequently "discard" my employer whenever a higher paying position comes along; there's no real "company loyalty" any more. (And I don't begrudge them that decision.) So why should my employer feel an obligation to not respond in kind? Besides: I'm not convinced training would help. The guy writing bloated, buggy, poorly performing code isn't going to magically starting writing clean, robust, succinct, performant code if we send him to a 3 week class.

          • Re: (Score:2)

            by AmiMoJo ( 196126 )

            You tell him that he needs to write better code, and here are some resources and classes he could take, and try to improve in the next six months.

            • Honestly, I'd rather my employer not risk spending money to train him (not to mention having to keep him on for another six months) only to have him perform exactly the same at the end of that period. I'd rather "we" as a development organization start to have actual hiring standards, and apply those standards retroactively to current employees based on the body of work we've already seen from them.

    • Because keeping employees on and never cutting them always works out in the end, just look at the union bakers that made Twinkies. Oh wait, that company went bankrupt and the recipes were bought by a company that automated 80+% of the process.

    • You are assuming these people won't get better jobs. Every time I was fired / let go in tech, I always found a better gig. In this industry especially, such an event is likely to be a blessing in disguise for the worker. By knocking them out of their comfort zone they may very possibly end up in a situation they otherwise never would have.

      Spinning rust had a great run . . . but we're already well into the era of storage on chips. A lot of these folks will upgrade their skill sets by making a move, even

      • Spinning rust had a great run . . . but we're already well into the era of storage on chips.

        Wait, what? While SSD tech is getting better, the advantages are in niche applications compared to the application for spinning rust, mostly because spinning rust can easily keep up with 95% of what is required from storage (playing movies, etc).

        Due to the (last I checked) 4x cost factor of SSD storage, I do not expect spinning rust to be toppled from the #1 spot anytime soon. Other than some fairly narrow use-cases, most people won't notice the difference in performance between platters and SSD, and even t

        • HDDs will stick around for a while -- even tape still exists for some circumstances -- but they really do not compare to SSDs in the long run, and even enterprise settings are moving massively toward SSDs. In those enterprise settings, the performance of SSDs over HDDs is just too compelling (including what it means for the bottom line), so pretty much every cloud-oriented company (speaking of both consumer-facing and internal storage) is making the switch. By the way, in that setting, you're talking about
  • "Specialist"

  • FFS (Score:3, Informative)

    by Anonymous Coward on Monday July 11, 2016 @08:42PM (#52493691)

    "Computer-memory specialist Seagate..."

    Try again:

    "Computer storage specialist Seagate..."

    Memory â Storage.

  • The real question is... (Score:4, Interesting)

    by __aaclcg7560 ( 824291 ) on Monday July 11, 2016 @08:42PM (#52493695)

    Did the Seagate stock price go up because of the layoff or that the S&P 500 broke records today?

  • and we can replce people with H1B's as HR will say that people will not be happy to be rehired at a lower rate.

    • You think Seagate still has American employees? Maybe 10.

    • ....better yet, outsource. If something goes wrong, the consultants are to blame (but you can take credit for successes). Salaried employees are a liability [marketplace.org] on the banksheets, them with their sick days and office space [imdb.com] and benefits. Can't be hired and fired easily, dead-weights on shareholder value, and since the 80's came along, the shareholder is LORD [marketplace.org] you tiny little worker man.

  • Because someone crunched numbers that weren't there. And then turned around and didn't crunch some numbers that were there.
  • And the stocks go up and the jobs disappear [youtube.com].
  • Under most circumstances, such a termination would be grounds to not receive any employment insurance benefits, or at least delay them pending an investigation to see if there was any wrongdoing on the employee's part that deserved dismissal (in which case they are not eligible for benefits).

    I was once fired for reasons that were not my fault and it delayed my benefits by almost a month. Sucked, royally.

  • 6500 new votes (Score:5, Insightful)

    by Snufu ( 1049644 ) on Monday July 11, 2016 @09:11PM (#52493851)

    for your local nationalist party.

  • "Computer-memory specialist Seagate announced that its Q4 revenue would be $2.65 billion, beating expectations of $2.34 billion, and up from the $2.3 billion guidance given previously,"

    Firings seem to have little to do with profits in corporate america. Profits up? Youre fired!, Profits down? Gotta downsize! Profits neutral? We need to trim the fat!
    I'm sure they have their reasons in the long run, but let it not be said that corporations behave rationally. You can't really, when profits is the goal.

    I would

    • What's odd is that they never notice where they can make the real cuts. Just look at the average CEO salary, if you get rid of that useless bozo, you can keep hundreds of people who're actually working!

  • Stock prices go up, money saved! (Score:5, Interesting)

    by AbRASiON ( 589899 ) * on Tuesday July 12, 2016 @12:04AM (#52494575) Journal

    Less customers to buy stuff though, because more and more and more and more people are either jobless or have less disposable income due to this bullshit and it keeps going on and it's starting to get bad.

    I'm convinced we're on the tipping point, real close to it. The division between the rich and the poor is about to be truly exposed soon.

    • Yes, we're really close to it. If you look over the shoulder, you can still see it.

      We've long PASSED that tipping point. The economy IS exactly in the current slump it is because people cannot buy anything anymore. Our warehouses are full. We are stockpiling like crazy, but there isn't anyone left able to buy those things.

      It's the same shit that happened in 1929, but apparently we're unwilling to learn from history.

      • I'm desperately trying to let go of my materialism or at least reduce it. It's difficult but I'm getting there.
        There's so many "bargains" so many 2 for 1s so many "must have new things" it's endless and maybe it's my imagination but since I've been an adult it's gotten worse, about 20 years, around the same length of time as the internet really.

        A much bigger pool of "joneses" to compete with for a start, globalisation reducing the cost of producing goods (for other consequences) and of course the spreadin

    • Yea. It's like people have forgotten Fordism in the quest to maximize shareholder value. Hell, I have disposable income and I don't spend money on bullshit.

    • Re: (Score:2)

      by waveclaw ( 43274 )
      If you read the filing the desktop market is tanking but the money is in storage for cloud providers. So these newly unemployed don't need to buy drives anymore just play Pokeymon Go! on their phones and keep uploading selfies on their data plans.

  • I use two computers regularly. I have two others that I employ occasionally, and am gradually being made the steward of quite a lot of others at work. I have another computer under construction. One of those boxes has a Seagate boot drive and a Seagate data drive. They have performed well.

    I don't believe for one minute that Seagate's cuts will result in anything even close to the quality of those two drives I have not experienced the quality programs some have, and until this moment, I would have disput

    • Re: (Score:2)

      by cdrudge ( 68377 )

      So I have now taken Seagate off my list of potential hardware suppliers.

      So who are you using then? Intel, AMD, Nvidia, Western Digital, Hitachi, Samsung...they've all had significant layoffs as part of cost cutting or restructuring. Your computers are going to suck if you just cross off names because they have layoffs.

  • Seagate Fires 6,500, Or 14% of Workforce, Stock Soars

    Of those laid off, how much of that was due to improved productivity?

    What were the roles?

    Were these engineers?

    Or workers whose jobs could be automated?

    Or how many of these were "dead weight" or in redundant functions?

    Or where people blindly laid off due to getting paid more than a certain salary cap, regardless of function just to make the spreadsheets pretty? *** (I've seen this.)

    Some layoffs are totally destructive. Others are completely justified. I've seen both types. The article doesn'

    • Replying to myself, I suggest people follow this: https://www.thelayoff.com/seag... [thelayoff.com]
    • Not so simple - sacking everyone working on a new product will improve productivity today if the metric is hours worked per product shipped. A lot of places have done that and had wonderful productivity figures right up to the day when a competitor with a better product comes in and takes their market.

      regardless of function just to make the spreadsheets pretty

      Even when it's regarding a function it can be the road to disaster if done badly. For example power plants have had to spend millions due to not mak

    • If the company can manage without the people it's laying off then why were the people hired in the first place? Seems to me like the managers who hired the extra people should be fired.

  • So, can we call it a bubble yet? Can we call it a recession yet? Can we call it a crisis yet? 1 in 6 children in the USA will go hungry tonight. Is that a sign of a healthy economy?

  • They could have kicked out the C-Level suits, just imagine what this could have done to the stock!

  • Cutting employees is a sure sign of a company in trouble, so why does the stock go up? Even with the fixation on quarterly results it doesn't make much sense to me. Are these all investors hoping that they will find another idiot to offload the stock to before it crashes?

    • Cutting employees is a sure sign of a company in trouble, so why does the stock go up?

      Cutting employees doesn't always mean a company is in trouble. Suppose they improved their production process so they are able to be 30% more efficient. Increases in efficiency often mean that fewer people are needed in the process.

      Even with the fixation on quarterly results it doesn't make much sense to me. Are these all investors hoping that they will find another idiot to offload the stock to before it crashes?

      Unless they're paying dividends, then yes.

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