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WD lops off 2,500 jobs and one fab

Tightening the industry belt
Thu Dec 18 2008, 14:05

ONE OF THE bigger HDD manufacturers in this world, Western Digital, has announced it'll be pulling out all the stops to cope with the current market conditions.

Acting on a lower-than-expected revenue (around 20 per cent shy of predictions to be precise) and weak demand for HDD product, beancounters at WD will be taking strong measures to cope with the current financial downturn. These will include, amongst other things, scaling back production, shutting down one of its three HDD manufacturing facilities in Thailand, selling off or closing down a substrate plant and laying off 2,500 personnel (5 per cent of the total workforce).

To even things out in the higher ranks, they'll be cutting "compensations of the company's executive officers", but somehow we think that'll account for a smaller part of spending at WD. No heads are heard to have rolled.

The current balance of things tells us that this isn't necessarily a bad thing for WD, as HDD makers will have to tread carefully as 2009 is a transitional year with SSD investment a must - although part of the announcement also involves cutting back on capital spending in 2009, by a quarter of a billion dollars.

The company won't be alone in this type of announcement, make no mistake. Similar contortionism is sure to sprout from Hitachi and Seagate as this starts making analyst rounds. µ


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