Western Digital Cuts 2,500 Jobs, Scales Back Operations

Posted by Paul Travis on December 19, 2008

Tags: Infrastructure,  Other

Channel: Data Center, Other

Western Digital Corp. (NYSE: WDC), the world second-largest maker of hard drives, says demand for its products has weakened significantly and that its revenue for the second quarter ending Dec. 26 will be below expectations. As a result, the company says it will lay off 2,500 workers, or 5 percent of its workforce, cut executive pay, and shut down some of its factories during the holidays.

The news comes a week after competitor Seagate Technology Inc. (NYSE: STX) announced that its revenues for the current quarter would be below expectations and that it would shut down its U.S. facilities from Dec. 22 until after New Year's Day in a cost-cutting move. Seagate said it expects revenues of $2.3 billion to $2.6 billion for its second quarter ending Jan. 2. The company had previously predicted revenues for the quarter to hit around $3.05 billion. Analysts had been predicting $2.9 billion.

Western Digital has forecast revenues of $1.7 billion to $1.8 billion for the current quarter. Analysts surveyed by Reuters Estimates had on average expected $1.97 billion. In October, the company had anticipated revenues of $2.03 billion to $2.15 billion.

The company said in a statement that industry pricing is significantly more competitive than previously forecast, contributing to the declines.