Summary
Seagate Technology Holdings plc (STX) has announced an expansion of its previously disclosed restructuring plan, impacting approximately 480 employees, representing 1% of its global workforce. This move is primarily aimed at aligning the Lyve Edge-to-Cloud Mass Storage Platform business with current market conditions and reducing near-term investment in Lyve Cloud, while maintaining the long-term strategy. The company anticipates this expansion will lead to significant cost savings to better navigate the challenging macroeconomic environment. The expanded plan is expected to incur pre-tax charges between $55 million and $65 million, comprising cash expenditures for employee termination and other exit costs, as well as non-cash charges. These initiatives are projected to yield annualized savings of $40 million to $45 million, with benefits beginning in the fiscal fourth quarter of 2023. As part of this restructuring, Executive Vice President, Storage Services, Ravi Naik, will be departing the company.
Key Highlights
- 1Seagate is expanding its October 2022 Restructuring Plan by reducing its global workforce by approximately 480 employees (1% of headcount).
- 2The workforce reduction is linked to aligning the Lyve Edge-to-Cloud Mass Storage Platform business with current market conditions and reducing near-term Lyve Cloud investments.
- 3The expanded plan is expected to incur total pre-tax charges ranging from $55 million to $65 million.
- 4These charges include cash expenditures for employee termination and exit costs, as well as non-cash charges.
- 5The company anticipates realizing annualized cost savings of $40 million to $45 million from this expanded plan.
- 6The benefits of these savings are expected to begin in fiscal Q4 2023.
- 7Ravi Naik, Executive Vice President, Storage Services, will be leaving the company effective April 3, 2023, in connection with the expanded plan.