Seagate is facing bad news on two fronts, with the company cutting 3,000 jobs and facing accusations of violating US export restrictions.
Seagate is one of the leading computer storage makers, but has been impacted by the economic downturn and lessening demand for personal computers. According to Bloomberg, the company is cutting 3,000 jobs as a result.
“Global economic uncertainties and broad-based customer inventory corrections worsened in the latter stages of the September quarter, and these dynamics are reflected in both near-term industry demand and Seagate’s financial performance,” said Chief Executive Officer Dave Mosley. “We have taken quick and decisive actions to respond to current market conditions and enhance long-term profitability, including adjusting our production output and annual capital expenditure plans.”
Potentially far worse for the company are accusations that it illegally sold hard drives to Huawei. Huawei is one of the companies the US Commerce Department has blacklisted over allegations it serves as part of Beijing’s spying apparatus. According to Reuters, Seagate was served a “proposed charging letter” from the Commerce Department over the alleged violation.
Seagate maintained in a filing that its hard drives are not covered by the export restrictions, and it is therefore not guilty of violating US law.
Only time will tell if Seagate’s position is correct, but the company clearly has some issues to address.