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Technology / Data

Western Digital cuts 2,500 jobs

The company, which is the world’s second-largest maker of computer disk drives, said demand for hard drives in the second quarter that will end on December 26 was significantly below expectations and has cut revenue guidance for the second quarter from a range of $2.03 billion to $2.15 billion to a range of $1.7 billion to $1.8 billion.

It plans to reduce its worldwide headcount by 2,500 people or 5%, and reduce its manufacturing work hours by 20% through reduced use of temporary workers, reduced shift overtime, and employee attrition.

It also plans to temporarily halt manufacturing operations from December 20 through January 1, and close one of its three hard drive manufacturing facilities in Thailand, and one of its two media substrate manufacturing facilities in Malaysia.

The company will cut salaries for its executive officers, board of directors, and senior management, as well as reduce capital spending for fiscal 2009 from $750m to $500m. It expects to incur charges of approximately $150m as a result of asset impairment, employee termination, and other exit costs.

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John Coyne, chief executive at Western Digital, said: In the current macro economic climate, we expect demand weakness to last well into the middle of 2009. We are taking these actions to strengthen our financial position and enhance the ability of our business to withstand an extended period of depressed demand while continuing to invest in other technologies, products, and processes.

The announcement comes a week after rival Seagate slashed its outlook for the current quarter and announced a temporary company-wide shutdown.


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CBR Staff Writer

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