Read-Rite Corp, which earlier this month warned investors of lower sales and greater losses than had been expected in its second quarter, is to lay off hundreds of jobs, according to a report in the San Jose Mercury. The Californian disk head manufacturer which has its headquarters in Milpitas and a manufacturing plant in Fremont, has cut about 10% of its US workforce, the paper said. The general downturn in the disk drive industry and problems in Asia have led to the situation. Last year Read-Rite lost a major customer when Micropolis Corp went into liquidation (CI No 3,301), and Western Digital Corp’s faster than expected transition from inductive thin film heads to the faster MR magnetoresistive heads also affected the company. Read- Rite is now pushing forward its own transition to MR heads, which are expected to account for the majority of its sales in fiscal 1998. Last year it sold $280m worth of MR heads, around 24% of its revenues. Read-Rite reports its second quarter results on April 15th, after the market closes.
