Seagate Technology to cut about 6,500 jobs; stock jumps 22% (opens in new tab)

Maybe if all of the cuts were in the Bay Area. However the article suggests it's the "manufacturing footprint" in Asia that will be most affected.

Potentially that's not a very bad severance.

There's also overhead of managing the terminations, which is likely in that $82m.

They have workers in many countries so it would depend on where they are happening.

Because it is a cost cutting measure they are assuming that after the layoffs the company will be selling just as much product but will have 6,500 less salaries to pay making them more profitable.

It's all about short-term savings, and a lot of investors think only short-term. The company will have more money because it won't have to pay all those people.

In the long term, this move will probably hurt the company unless all those workers were unskilled assembly line workers. When I hear such news, I seriously consider selling a stock, because that means the company is likely going to be steadily going downhill over the long term.

Sometimes a company in this situation gets it together and does well for itself again. In that case, it's worth buying the stock again. That's by no means certain, so in my opinion a buy and hold strategy isn't worth it for companies that are conducting layoffs due to financial difficulties.

If the company is having difficulties, which we'd expect with the advent of SSDs as at least in part a disruptive innovation, it can be a sign that management and the board are at least acknowledging the problems. Better than a controlled flight into terrain (https://en.wikipedia.org/wiki/Controlled_flight_into_terrain).

For the same reason amazon goes down after they reach their profit targets.

Day trading volume is like 70% automatic. Which means it's basically dumb machines fighting dumb machines, and a bunch of speculators trailing the party.

They can still become Uber drivers. Welcome to the YCombinator Economy! :)

They won't, though.