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By | Chris Mellor 8th September 2008 21:24

Seagate layoffs coming?

Possible facility closures too

Seagate is focusing on cutting OPEX, and a financial analyst expects facility closures and/or headcount reductions over the coming months.

Wachovia's Aaron Rakers investors' research note says that Seagate is looking to trim operating expenses, with an OPEX/revenue ratio below 12 per cent being the aim.

The company hopes that its new 500GB 2.5-inch drives will increase its gross margin as the 250GB/platter area density allows it to sell a 250GB unit with one platter and dual heads instead of with two platters as it did before. Rakers expects a FreeAgent software refresh which, combined with the new 500GB drives, will strengthen Seagate's retail presence. He understands that Seagate expects Western Digital to have a 500GB 2.5-inch drive out in the fourth quarter of this year.

There are, Rakers writes, more than 100 Seagate engineers focussed on enterprise solid state drives with a product announcement expected in the second quarter of 2009. ®

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