130 Layoffs Finish Western Digital Restructuring
Western Digital Corp., one of Orange County’s largest high-tech companies, laid off 130 workers last week, capping a series of retrenchment moves designed to return the company’s focus to the manufacturing of disk drives.
The cuts, which affected about 14% of the Irvine-based company’s work force, came as Western Digital completed the sale of business units that make computer input and output devices and fiber-optic communications links.
Employees affected by the cuts were notified in a series of meetings in recent weeks, and are being offered extended benefits and job placement assistance. Western Digital still employs about 8,400 workers worldwide, including 780 in Irvine.
Officials said the cuts mark the completion of an effort to sharpen the company’s focus on its two remaining business units, both of which make computer disk drives.
“We had staff to support three business units,” said Robert Blair, a company spokesman. “We had to get the cost of business in line with the new structure.”
Blair said employees who worked in the units that were sold had known layoffs were possible since February, when the deals were announced. About 25% of those workers have already found other jobs in Orange County, he said.
The larger of those deals involved the sale of a unit that makes input and output devices--which help computers communicate with printers and other peripheral machines--to Adaptec Corp. of Milpitas for $33 million in cash and a royalty agreement. Adaptec, which is setting up a satellite operation in Irvine, also hired about 95 Western Digital employees, Blair said.
Western Digital also sold a unit that makes fiber-optic communications links to Vixel Corp. of Broomfield, Colo. Vixel has hired about 15 Western Digital workers, Blair said.
Blair said no other job cuts or sales are planned at Western Digital, which is one of the world’s largest disk drive manufacturers, but has seen its profit margins thinned by fierce price competition in recent months.
The company reported a profit of $36.4 million in the last quarter of 1995, but that included a gain of $17.3 million from the sale of its multimedia business. In the comparable quarter a year earlier, Western Digital posted a profit of $42.6 million. Revenue in the December quarter rose 37% to a record $758 million from $552 million.
