The economic instability in the IT world has led buyers to prefer inexpensive products. At the expense of performance and quality, owners of computers and laptops have switched to budget Chinese brands. Over the past six months, companies like Samsung, Adata, Transcend, WD, Toshiba, and many others have revised their pricing policies. Separate product lines capable of competing in the lower price segment have appeared.
Unfortunately, Seagate Technology has taken a different path. The budget segment has been filled with outdated technologies in an attempt to retain customers. Naturally, the demand for storage devices has significantly decreased. People have shifted to other brands offering more advanced computer components.
Seagate Technology Faces Default
At the end of October 2022, Seagate’s management announced mass layoffs. The plan is to reduce 8% of employees worldwide. On average, this amounts to 3,000 employees. Calling the layoffs a restructuring, Seagate has already announced savings of 110 million US dollars per year.
In all of this, Seagate blames the decline in demand for hard drives. According to marketers, buyers are increasingly preferring solid-state drives. Yet, it is unclear where the 15% sales growth last year for Toshiba came from. And the manufacturer SYNOLOGY has even expanded its HDD product line.
Thus, Seagate’s problem with falling demand is not related to consumer purchasing power but to pricing. When recalculating the price per unit of volume, each terabyte of data becomes too expensive compared to similar brands. As a result, the company has essentially sabotaged its own sales.
The reduction in staff does not lead to good outcomes. First, stock prices will fall, then technological stagnation due to a drain of investments, and eventually, default is not far off. Seagate’s management urgently needs to attract new talent and change their pricing policy. There is still a chance to restore the brand’s reputation. After all, consumers have never questioned Seagate’s products. The brand boasts excellent lines of disks like IronWolf and Barracuda, which demonstrate high performance and durability in operation.
