Hard Disk Maker Plans to Cut 2,500 Jobs

Western Digital Corp. said it would slash 5% of its work force, or about 2,500 jobs, as falling demand for computers and electronics hurt disk-drive makers.

The company also lowered its revenue outlook for the current quarter. As a result, the Lake Forest, Calif.-based company said it plans to reduce production and cut operating expenses across the company.

Western Digital will halt most of its manufacturing operations from Dec. 20 through Jan. 1. It will also close one of its three manufacturing facilities in Thailand, and close or sell one of two manufacturing facilities in Malaysia.

The cost-cutting moves, expected to be completed by the end of March, are expected to result in total charges of about $150 million, spread over the December and March quarters.

The company said demand for hard drives was "significantly below" expectations in the December quarter, and Chief Executive John Coyne said demand was likely to stay weak until the middle of 2009.

Western Digital lowered its fiscal second-quarter revenue outlook to a range of $1.7 billion to $1.8 billion from its October forecast for $2.03 billion to $2.15 billion.