Western Digital today announced that second fiscal quarter sales ending on December 26, 2008 will be well below its original target of between $2.025 billion to $2.150 billion, a prediction made just in October.
WD now expects revenue to be in the range of $1.7 billion to $1.8 billion, with a corresponding hit down the line in operating results and net income. Like a lot of tech firms, the company is not seeing a recovery in demand for several quarters.
As such, the company is taking some rather drastic steps. It’s cutting 2,500 jobs worldwide, about five percent of its headcount, reducing work hours by 20 percent, stopping the majority of its manufacturing operations from December 20 through January 1, 2009 and (Detroit, take note) reducing executive compensation.
WD will also close of one of the company’s three hard drive manufacturing facilities in Thailand and one of two media substrate manufacturing facilities in Malaysia. The total reduction in capital spending for the fiscal year 2009 will be $250 million.
It’s starting to feel an awful lot like 2001 again, only this time, it wasn’t the tech sector that was stupid, it was the financial market. Tech just got caught in the blast radius.