Western Digital Reduces Workforce in S’pore

Posted on May 21, 1998 
Filed Under AsiaBizTech, Julian

By Julian Matthews

May 21, 1998 (KUALA LUMPUR) — Western Digital Corp. has laid off 439 employees from its disk drive plant in Chai Chee, Singapore, the company announced in a statement last week (May 14). From Malaysia

The cuts were in response to the oversupply conditions and fierce pricing pressures affecting the company and the industry globally, said Vince Mastropietro, managing director of Western Digital (S) Pte Ltd.

“The headcount reduction is a direct and unfortunate consequence of the reductions in our production over the last several months,” he said.

The company’s other desktop drive plant in Kuala Lumpur, Malaysia, and its enterprise drive plant in Tuas, Singapore, are not affected by the move. Western Digital substantially reduced production over the last three quarters in response to the sharp decline in demand.

The 439 job cuts affected both production and non- production staff. Compensation ranged from as low as a week’s pay for those with less than a year of service, to a month’s pay for each year for those with more than three years of service.

Western Digital said it is working with government agencies, recruitment groups and outplacement agencies as well as other manufacturing companies to help the former employees find new jobs.

The Chai Chee plant now has a staff of 4,100. Western Digital has another 1,200 workers in Tuas. That plant manufactures its Enterprise line of 2.1GB, 4.3GB and 9.1GB Ultra SCSI drives for the server market.

In Malaysia, Western Digital (Malaysia) Sdn Bhd managing director John Coyne said the Kuala Lumpur plant has a work force of 5,500.

“We continue to hire for critical areas, but are more selective in our recruitment,” he said.

The plant makes half of the company’s Caviar line of 3.5-inch Enhanced IDE desktop drives in the 2.1GB to 6.4GB range. It also produces printed circuit board assemblies for the drives. The company’s most recent product, an 8.4GB desktop drive, will soon be made at the plant.

Coyne said that the Malaysian plant has gradually taken on increased responsibility from its Singapore counterpart, bringing new products to volume production soon after they are launched at the Chai Chee plant. He said the plant is on target to transition 80 percent of its products from thin-film to magneto- resistive (MR) technology by this quarter.

Coyne said he hopes to see a recovery in the drive industry by the second half of the year.

“Analysts say there are some signs of improvements, especially in reductions of channel inventories. We are cautiously optimistic that there will be some light at the end of the tunnel,” he said.

In its most recent fiscal quarter ending March 28, the Irvine, CA- based drive- maker reported a net loss of US$45 million on revenue of US$831.3 million. For the first nine months of fiscal 1998, the company posted a net loss of US$127.5 million on revenue of US$2.9 billion, versus net profit of US$179.7 million on revenue of US$3.1 billion for the same period in fiscal 1997. The company currently employs about 13,000 staff worldwide.

Western Digital was the latest casualty in an industry beset with a supply glut, weak demand and intense pricing pressures. In February, Seagate Technology Inc. slashed 10,000 jobs worldwide in an attempt to restructure its operations, mainly affecting staff in Malaysia, Singapore and Thailand. About 4,900 employees in Thailand, 2,191 in Malaysia and 1,800 in Singapore lost their jobs.

Published in Asia BizTech, May 21, 1998

by Julian Matthews, Asia BizTech Correspondent

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