Western Digital Corp.’s massive integration of SanDisk Corp. and HGST already has led to more than 500 job cuts in the past month, and more are expected.
Its Silicon Valley outposts in Fremont and San Jose have taken the brunt of the latest cuts, with 408 positions scheduled to be eliminated by July 3, according to filings with California’s Employment Development Department. HGST is based in San Jose, where Western Digital has its second largest operation behind its Irvine headquarters at Park Place near the San Diego (I-405) Freeway at Jamboree Road.
SanDisk is based in nearby Milpitas.
The Business Journal last month reported that the world’s largest disk drive maker is slashing nearly 100 more jobs in Orange County—81 in Irvine and 18 in Santa Ana—as it integrates its $17 billion SanDisk buy, which closed about a month ago. The integration, handled by a 200-member WD team, is projected to lead to $500 million in annual cost savings within 18 months and $1.1 billion in savings by 2020.
Areas of cost savings include integrating SanDisk’s NAND flash memory operations with WD’s storage systems business, and eliminating positions in sales and marketing, administration, and research and development.
The Business Journal in late March reported WD planned to restructure its international operation “shortly after” the SanDisk deal, but the latest moves aren’t part of that plan, according to spokesman Steve Shattuck.
“We are appropriately sizing our organization to deliver value to customers and remain competitive,” he said.
The buy followed Chinese regulators finally approving its $4.8 billion integration of HGST—acquired in March 2012—which includes factories around the globe and 41,000 employees. The long-waited approval will lead to annual operating expense savings of about $400 million, with additional unknown savings on costs of goods sold.
WD employed 76,449 through July 3, and SanDisk employed 8,790 through Jan. 3, according to the companies’ annual reports.
WD entered May with about 1,700 local workers, down 10.7% from a year earlier, according to Business Journal research.
It was hit particularly hard last year as global PC sales sunk to the lowest levels since the early days of the Great Recession in 2008.
Caltech Sues Broadcom
California Institute of Technology in Pasadena filed a lawsuit in federal court for Central California against Broadcom Ltd. and Apple Inc. claiming infringement of patents.
The lawsuit specifically takes aim at the alleged misuse of Wi-Fi technology and encoding and decoding of chips to improve data performance and transmission.
Broadcom Ltd., which was formed in February after Broadcom Corp. in Irvine was sold for $37 billion to Avago Technologies Inc. in Singapore, is a global leader in connectivity chips, and Apple is one of its largest customers. Broadcom’s communication chips, which were developed and designed in Irvine, are in the iPhone, Apple Watch, MacBook and iPad.
Clean Bus Gas Deal
Newport Beach-based Clean Energy Fuels Corp. has been awarded a five-year, $15 million contract to supply Santa Monica’s Big Blue Bus fleet with liquefied natural gas.
The Los Angeles County beach city’s transit agency is among the first to buy Clean Energy’s Redeem, a renewable fuel processed from biomethane that it introduced in 2013.
The nation’s largest builder and operator of natural-gas fueling stations turned some heads last month when it reported first-quarter financials that blew Wall Street expectations out of the water, including posting the first adjusted profit in its 19-year history.
