The track record of Chief Executive Steve Milligan and Chief Financial Officer Olivier Leonetti might have foreshadowed Irvine-based Western Digital Corp.’s extensive job cuts in recent years.
The world’s largest disk drive maker, which employs about 76,000, has cut about 4,500 jobs in the past 12 months and some 30,000 in four years. It’s shed nearly 200 workers at its headquarters since late May, about 10% of its local work force, amid sagging PC sales and waning demand for physical storage products as more consumers use cloud storage.
Milligan, who took the helm in January 2013, garnered Wall Street kudos for reshaping the HGST unit of Japan-based Hitachi Ltd.—a chore that included job cuts and plant closures—from an unprofitable operation into a thriving global competitor before it was acquired by Western Digital in 2012 for $4.8 billion.
Leonetti, who took over as finance chief in September 2014, most recently served in the same role for Thousand Oaks-based Amgen Inc.
He was instrumental in laying out the blueprints for the drug developer’s widespread restructuring plan, which was announced a few months before he took the job at Western Digital. The cuts include 3,500 to 4,000 positions by the end of this year, a roughly 16% to 18% companywide reduction, and closing facilities in Washington state and Colorado, roughly 23% of its operations.
Scandal’s Reach Short
The accounting scandal and public fallout at Toshiba Corp.’s Tokyo headquarters hasn’t hurt business at two of the brand’s largest U.S. business units with links to Orange County.
“We haven’t seen it affect the business,” according to Scott Maccabe, chief executive of Irvine-based commercial electronics products marketer Toshiba America Business Solutions Inc.
He was recently tapped by Japanese brass to take on the same role for Raleigh, N.C.-based Toshiba Global Commerce Solutions Inc., which specializes in point-of-sale systems for retail.
Toshiba America Business Solutions is among OC’s largest private companies, with about $1 billion in annual sales. That’s nearly half of the global unit’s more than $2 billion in annual sales.
The scandal and disclosures that senior management overstated profits by about $1.2 billion over seven years has tarnished the 140-year-old Toshiba brand, prompting the resignation of Chief Executive Hisao Tanaka, Vice Chairman Norio Sasaki, and eight board members.
VR Boom
Taiwan-based market researcher TrendForce Corp. predicts that 14 million units of virtual reality devices—with base models in the $300 range—will be sold next year.
Samsung Electronics Co. became the first manufacturer to release a commercial virtual reality headset this year, although content on the Samsung Gear VR can only be displayed through an app running on the Note 4, Galaxy S6 and S6 Edge smartphones.
Oculus VR Inc., which started in Irvine and maintains a presence here after its $2 billion sale to Facebook, plans to release the Oculus Rift early next year. Tokyo-based Sony Computer Entertainment Inc. also plans to soon release a virtual reality system geared for gaming on PlayStation 4 called Project Morpheus. And HTC and Valve are planning a consumer rollout of their VR headset version, the Vive, early next year.
Several OC companies are closely tied to technology’s hottest segment, including Laguna Beach-based content provider NextVR, video game maker Ready at Dawn, and content provider EON Reality Inc., both of which are based in Irvine.
