Komag to Cut U.S. Work Force by Nearly 50%

Komag Inc., the leading maker of disks used in computer disk drives, said it will cut almost half of its remaining U.S. work force and will shift manufacturing to Malaysia to reduce costs. Komag will close two plants in San Jose, where the company is based, and cut its U.S. work force to 570 from 1,050. Komag will take a significant charge in its fiscal third quarter ending Oct. 3. Last month, Komag said it would slash 500 U.S. jobs because of falling sales and prices; it eliminated 400 jobs last quarter. Disk drive makers such as Seagate Technology Inc. are cutting prices to maintain or increase their market share as PC makers seek cheaper parts. At the same time, technology advances are reducing the number of disks in the drives, depressing prices for Komag’s products. After the cuts, the company’s U.S. work force will consist of about 220 people at its Santa Rosa, Calif., facility and 350 people in San Jose, where research and development are done. Almost all of the company’s manufacturing will be done in Malaysia, where it employs about 2,750 workers and expects the plants to operate near their capacity. The stock has fallen 66% this year.