"Our discussions with STX suggest there will be a phase 2 of the cost takeout program that will entail capacity, equipment and manufacturing site consolidation. In the current phase, STX expects to reduce headcount by 3% (~1,600 employees) and incur $62M of charges over June/Sept quarters. STX expects to realize $100M of savings that should benefit EPS on an annualized basis by ~$0.30-0.35c. We think these cost reductions enable a path towards ~$2.00 EPS (assuming 5% TAM decline in CY17). We expect the 2nd phase will be larger in size and savings given their target of “at least $2.50″ EPS by CY17. Maintain SP and $24 target."
Full Article http://blogs.barrons.com/techtraderdaily/2016/06/30/seagate-job-cuts-just-the-beginning-of-realignment-says-street/