Seagate ‘cannot speculate’ on potential for job cuts in Derry

US Special Envoy to the North for Economic Affairs during a visit to Seagate last week.

Last week the hard disk manufacturer said it was taking ‘aggressive actions to lower our cost structure’ after quarterly revenues came in below expectations.

“We are seeing a more elongated customer inventory correction that led to weaker than expected nearline demand among a few large customers late in the quarter.

"Consequently, our March quarter revenue came in at the low-end of our guidance range, which along with underutilization charges and other factors had a severe impact on our reported margins and profitability,” said Dave Mosley, Seagate’s chief executive officer.

“Looking ahead, we now expect demand recovery to begin towards the end of the calendar year.

"In response to this dynamic environment, we are taking aggressive actions to lower our cost structure while still positioning Seagate to thrive over the long-term and sustain our technology leadership,” he stated.

Mr. Mosley confirmed that its operating expenses for the last quarter included a $300m settlement for alleged violations of US Export Administration Regulations by the US Department of Commerce's Bureau of Industry and Security (BIS).

The settlement related to Seagate’s sales of hard disks to Huawei between August 17, 2020 and September 29, 2021.

Seagate agreed to pay a settlement of $300m in instalments of $15million per quarter over five years.

The US company is one of Derry’s largest employers with over 1,000 people working in Springtown.

Last week US Special Envoy for Economic Affairs Joe Kennedy III visited the facility, marvelling at its technological processes, and trying ‘in vain to understand how you affix a laser to something the size of an atom’.

The ‘Journal’ asked if job cuts were likely to be announced in Derry.

A spokesperson said: "The company has committed to a global restructuring plan to reduce its cost structure in response to changes in macroeconomic and business conditions.

"The global plan is intended to align the company’s operational needs with the near-term demand environment while continuing to support the long-term business strategy.

“Seagate cannot speculate on any numbers or positions while our restructuring is in progress. As noted in our press release, we expect this process to be substantially completed by the end of the current quarter."