This one word is the last thing you want to hear when your company gets bought out
This deal would solidify Western Digital claim as a global storage behemoth.
But a company never takes out another company just to increase its footprint. They do it to increase value for shareholders.
"I'm excited to welcome the SanDisk team as we look to create additional value for all of our stakeholders," CEO Steve Milligan said explicitly.
One way managers do this is by eliminating redundancies in their efforts to cut costs. They call it "synergy," which is a word that probably has every Western Digital and SanDisk employee a little nervous. The company explained in the news release:
"The company expects to achieve full annual run-rate synergies of $500 million within 18 months post-closing. The transaction is expected to be EPS accretive on a non-GAAP basis within 12 months of the transaction close."
"Synergy" usually means the closing and combining of offices and warehouses, which also often comes with job cuts.
Western Digital employs around 76,000 people worldwide. SanDisk employs about 8,700.
This is a very rough calculation, so take this with a grain of salt. But assuming half of those potential synergies ($250 million) come from reduced headcount and each worker saves $150,000, this back-of-the-envelope calculation would see more than 1,600 employees being let go.
The companies haven't actually announced or quantified any reductions in headcount just yet. But you can bet that announcement is coming.
- US buys 81 Soviet-era combat aircraft from Russia's ally costing on average less than $20,000 each, report says
- 2 states where home prices are falling because there are too many houses and not enough buyers
- A couple accidentally shipped their cat in an Amazon return package. It arrived safely 6 days later, hundreds of miles away.
- Why did a NASA spacecraft suddenly start talking gibberish after more than 45 years of operation? What fixed it?
- ICICI Bank shares climb nearly 5% after Q4 earnings; mcap soars by ₹36,555.4 crore
- Markets rebound sharply on buying in bank stocks firm global trends
- Bengaluru's rental income highest in Q1-2024, Mumbai next: Anarock report
- Rupee falls 10 paise to settle at 83.48 against US dollar