7Seagate_Logo.jpgSeagate Technology (NASDAQ: STX, STX message board) tanked nearly 20% today after the company issued worsened revenue guidance for the third quarter of 2009. The expected amount of $1.6 to $2 billion in revenues fell behind analyst expectations of $2.2 billion for the period. The company also reduced quarterly dividends to $0.03 per share which also added to the stock plunge.

Of course, all the company does is trying to survive. They're operating in a market sector which has experienced a setback during the crisis and weakened demand is driving the company down. It is a good thing the company has not yet turned to losses. But that is most probably just a matter of time.

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Seagate said on Thursday they will be shedding 600 workers on so called early retirement program. Although these workers will be compensated for immediate termination, this shows the situation is worsening rather quickly. The company has already laid off 400 workers earlier this month and reduced backoffice employee's salaries by 25%. A total of nearly 3 thousand workers are planned to be laid off due to worsening economic conditions that affect Seagate's business.

The company's stock has been on a downtrend for the last 6 months and it is likely the latest news will add to continuation of this trend. Selling pressure has increased over Thursday trading session and the stock has hit new multiyear low.

References:

Seagate Technology (STX) message board on HotStocked