CES: Seagate CEO Watkins Says December Was “Terrible”

Seagate (STX) CEO Bill Watkins told Tech Trader Daily on Friday that December was “just terrible” in terms of disk-drive demand, due in part to a sharp drop in distribution channel inventories. Watkins said channel inventories for disk drives are the lowest he has ever seen, as low as four weeks, and notes that distributors are having trouble getting credit. Watkins notes that the company will announce a restructuring sometime this month which will likely result in a reduction in production capacity and significant layoffs. The company currently has about 50,000 employees worldwide; it’s not hard to imagine there will be thousands job cuts. On December 10, the company cut its Q4 revenue forecast to a range of $2.3 billion to $2.6 billion, down from previous guidance of $2.85 billion to $3.05 billion. But Watkins says that demand in the final month of the year was even worse that he thought. Meanwhile, Watkins says he continues to expect substantial consolidation in the ... (link)