Lake Forest’s Western Digital Corp. said Wednesday it’s set to slash some 2,500 jobs and cut executive pay in a bid to offset slumping demand for its disk drives.
In the same announcement the company also lowered its sales outlook for the current quarter.
For the quarter ending Dec. 26, Western Digital is looking for sales of $1.7 billion to $1.8 billion, down from its previous forecast of $2.025 billion to $2.150 billion.
The company didn’t give a profit outlook.
Wall Street analysts, on average, are expecting Western Digital to post profits of $166 million on sales of $2 billion.
Western Digital got hit by a double whammy: Demand for its drives is falling as consumers pull back their spending on things such as laptops and external storage devices. It’s also getting squeezed by lower prices for laptops.
“In the current macro economic climate, we expect demand weakness to last well into the middle of the 2009 calendar year,” Chief Executive John Coyne said. “We are taking additional steps to immediately reduce production capacity and operating expenses on a longer-term basis across our entire business.”
The job cuts amount to about 5% of Western Digital’s total workers. Its unclear how many of them will be local.
The company is also taking other cost-cutting measures, including reducing executives’ pay and cutting the work hours of its manufacturing sites.
It also plans to shutter a few of its factories in Malaysia that make drives and parts.
The moves are expected to save about $500 million to $750 million a year starting next year.
Western Digital had a recent market value of about $3 billion.
It’s been a tough couple of weeks for Orange County tech companies.
A slew of them have cut their forecasts for the current quarter, including Irvine’s Broadcom Corp., Santa Ana’s STEC Inc. and Newport Beach-based Conexant Systems Inc.
