Xidex to Close Irvine Plant, Lay Off 825 Workers
Xidex Corp., a manufacturer of hard disks for computers, is closing its Irvine plant and laying off 825 workers, it was learned Thursday.
The layoff is one of the largest ever in Orange County and underscores a continuing slump in the market for computer disks. Hard disks are permanently mounted in personal computers and are used to store information electronically.
The company is consolidating the disk business at its Santa Clara headquarters, a spokesman for Xidex’s parent company said.
Xidex blamed declining sales of the type of disk it makes, called a rigid oxide disk.
The layoffs come only six weeks after Xidex was acquired for more than $400 million by Anacomp, one of its biggest customers. Anacomp is an Indianapolis manufacturer of computer systems and software.
Anacomp’s purchase of much-larger Xidex could vault the company over the billion-dollar mark in annual sales and put it in the Fortune 500 list of the nation’s largest companies.
Anacomp is expected to have sales of $400 million this year; Xidex $600 million.
But the layoffs in Irvine suggest that Anacomp, which borrowed heavily to acquire Xidex, wants to prune back some Xidex operations.
The company laid off 180 workers last week and is furloughing the rest Thursday and today. Of the 825, 725 were blue-collar workers and 100 were administrators and engineers.
“I got here at 3 p.m., and my boss said I should clean out my desk and locker, everything,” said Hai V. Phan, an electronic engineer technician who has been with the company for four years.
The plant had been in operation for seven years, first operated by Charlton Associates before being acquired by Xidex in 1986.
The workers will get a package of benefits based on the length of their employment. The plant will be closed soon, said a spokesman.
Anacomp recently reported sales of $301 million for the first nine months of its fiscal year ending June 30, compared to $167 million last year.
Seagate Cuts Back Purchases
The jump reflects the addition of another Anacomp acquisition, DatagraphiX, which Anacomp bought from General Dynamics Corp. for $128 million in 1987.
Industry analysts and Xidex employees said the layoff was prompted by cancellation of orders from the largest customer of Xidex’s Orange County operation, Seagate Technology of Scotts Valley, Calif., a manufacturer of disk drives for personal computers.
“The short-term problem is Seagate has cut back on purchases from Xidex,” industry analyst James Porter said.
Seagate, the nation’s largest independent producer of disk drives, has been in financial difficulty and last summer laid off more than 1,000 at its manufacturing facilities in Scotts Valley and Singapore.
Seagate Technology expanded its production capacity in anticipation of strong market growth. But the market has not expanded as rapidly as Seagate and other disk drive makers expected, leaving Seagate with “a hell of a lot of drive in inventory,”’ said Jack McLaughlin, president of Business Research Consultants, a San Jose research firm.
Times staff writers Leslie Berkman and David Olmos contributed to this story.