Hard drive maker Seagate says the company will cut 3,000 jobs in a restructuring as the U.S. Commerce Department alleged Seagate has violated export sanctions. Seagate denies it violated the sanctions. Photo by Tony Webster/
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Oct. 27 (UPI) -- Seagate Technology will cut 3,000 jobs as it faces a charge from the U.S. Commerce Department that the hard-drive maker has violated sanctions export rules. Seagate denies it violated the restrictions.
Seagate said in a statement it will cut 8% of its global workforce, cutting approximately 3,000 jobs "to reduce its cost structure to better align the vompany's operational needs to current economic conditions while continuing to support the long-term business strategy."
The job cuts and other cost saving measures are part of a restructuring plan approved by Seagate's board of directors expected to be "substantially completed" by the end of the second fiscal quarter 2023.
The U.S. Commerce Department's allegation that Seagate violated export sanctions was described in a U.S. Securities and Exchange Commission form 8-K report.
That report said, "On August 29, 2022, Seagate Technology Holdings received a proposed charging letter from the U.S. Commerce Department's Bureau of Industry and Security, alleging violations of the U.S. Export Administration Regulations."
The SEC form is required to be filed by companies to inform investors of government actions affecting the company.
According to that filing, Seagate said it did not engage in prohibited export conduct as alleged, because, among other reasons, the company maintains Seagate's hard drives are not subject to the export regulations.
The government's charging letter alleges Seagate violated export sanctions by providing Seagate hard drives to "a customer and its affiliates listed on the sanctions list between Aug. 2020 and Sept. 2021."
"Seagate believes it has complied with all relevant export control laws and regulations," the company said in a statement on that SEC form. "Seagate has committed to compliance through its global team of international trade compliance and legal professionals and by maintaining robust trade controls compliance policies and procedures."
The matter remains unresolved. Seagate said it has been cooperating with authorities and intends to continue to engage with the U.S. Commerce Department's Bureau of Industry and Security to resolve the issue.
