Question-and-Answer Session
Operator
(Operator Instructions).
Our first question comes from Keith Bachman with Bank of Montreal. Your line is open.
Keith Bachman - Bank of Montreal
Hi, guys. Thanks very much. I had two questions if I could. The first, Tim, for you, the $150 savings that you identified in annual savings, could you just give us a little flavor about how and when that shows up, how that unfolds? And then, particularly, how we should be thinking about COGS versus OpEx? And then I have a follow up. Thanks.
Tim Leyden
Yes, we anticipate that we will be at that run rate from the 1st of April and so consequently move right through the June quarter. And we'd be at that new run rate. And then on COGS versus OpEx if we look at the $150 million savings, it's about two-to-one.
Keith Bachman - Bank of Montreal
Two-to-one.
Tim Leyden
Yes, two-to-one, OpEx versus COGS. Now please remember that in the June quarter, it's a 14-week quarter for us.
Keith Bachman - Bank of Montreal
Right, fair enough. Okay. Thanks, Tim. And then my follow-up is: you have identified how much capacity that you anticipate taking out of your system? I just wonder, through your industry analysis, how much you think the industry is looking to take out of total capacity.
John Coyne
I think, Keith, as we indicated, we saw the industry demand come down by some 13%, 14% on a quarter-over-quarter basis into the December quarter. And we are modeling industry demand to go down another 13% into the March quarter.
Now we are talking at ATA 3.5 and 2.5 inch combined, and our view would be that the capacity should come down by the same amount that the demand is predicted to be down if we desire to achieve that supply demand balance which is so critical to the health of this industry.
Keith Bachman - Bank of Montreal
Right, fair enough. Okay. Thanks, guys, I see.
Operator
Our next question comes from Shebly Seyrafi with Calyon. Your line is open.
Shebly Seyrafi - Calyon
Yes, thank you very much. I just want to make sure I understand this math correctly, because your headcount was reduced by 500 and something sequentially already, you targeted 2500 or so. So, I think you have 80% more to go in terms of the headcount target. Should we think about 80% of $150 million divided by four as the quarterly difference between the OpEx in the December quarter and where you going to be at the end of June?
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