On the shortlist of requirements for Western Digital Corp.’s new headquarters: “cheap” and “cheerful.”
“Flashy” or “new” didn’t even register.
“Before we started this whole project, the management team tried to sit down and determine what we wanted,” said Dick Salvi, Western Digital’s senior director of corporate services, who’s been at the disk drive maker for 25 years. “Image was not one of the key attributes we were looking for.”
Western Digital, a maker of disk drives for computers and consumers, is unabashedly thrifty. Last year, it signed the largest office lease in the county in several years, taking advantage of a renters’ market.
With yearly sales of $10 billion, Western Digital is the second largest here after Santa Ana’s Ingram Micro Inc. But it wasn’t looking to project its size with a headquarters to match.
“We weren’t looking for a nice building,” Salvi said. “We were looking for a B or C type of a building.”
In fitting with a culture of frugality driven by an industry with slim profit margins, the company’s headquarters at 3353 and 3355 Michelson Drive is functional, if not a bit dated.
“We weren’t going to spend too much,” Salvi said. “We didn’t want our customers to get the impression that we were wasting our hard-earned money.”
The biggest reason for the move was to consolidate Western Digital workers who have been spread across five South County buildings.
Western Digital had outgrown its three-building Lake Forest headquarters. In the past decade, the company took extra space in a handful of other buildings.
It had one in south Irvine, two in Lake Forest about a mile from its headquarters, and another in Aliso Viejo, which came from Western Digital’s 2009 buy of SiliconSystems Inc. for $65 million.
Space
The company has 350,000 square feet at Park Place, an office and retail complex at Jamboree Road and Michelson Drive.
It’s enough space to gather all of Western Digital’s local workers into two adjacent buildings, with room to grow.
The site houses all of Western Digital’s corporate functions, with offices for its executive, legal, sales, marketing and operations teams.
It also includes space where drives and drive parts are tested and labs for product development.
Other reasons for the move included a lack of parking, a shortage of meeting space and a dearth of power supplies.
The parking situation in Lake Forest was “atrocious” and the office’s power generators were “at capacity,” Salvi said.
“We had flat outgrown the place,” he said.
Managing disparate sites was difficult and inefficient, according to Salvi, who manages all of Western Digital’s California facilities.
“The more walls you have, the less space efficiency you have,” he said.
Even as Western Digital skipped on flash, it wanted to be a bit more visible. Early this year it installed a big marquis that can be seen from the San Diego (I-405) Freeway.
The sign comes amid a push by Western Digital into branded drives for consumers.
“Historically we’ve been a manufacturer without a lot of brand recognition—our products went into a box,” Salvi said. “In the last few years, a lot of our growth is attributed to our branded business. It becomes more important to us to have our name out there.”
Western Digital’s branded products business consists of drives that are packaged and sold in stores—including external drives, network drives and media players that store songs, pictures and videos.
Branded products made up about 22% of Western Digital’s $2.5 billion in revenue for the December quarter.
Profits are another matter. The company had a $225 million profit in the December quarter, equal to 9% of its sales.
That’s more than Ingram Micro’s 1% net profit margin, but not as good as Irvine chipmaker Broadcom Corp.’s 14%.
“We didn’t want to increase our operating expenses” with a move, Salvi said.
Inside
Inside, Western Digital’s headquarters is pretty vanilla, with grey cubicles and blond wood furnishings.
The company added some wall and ceiling accents in the blue of its logo.
Some of the offices were designed to be modular, so people could move around depending on their task.
The biggest change: having neighbors.
“We had always been on our own campus in the past,” Salvi said.
Other Park Place tenants include Balboa Insurance Group Inc., State Farm Insurance Co., Farmers New World Life Insurance Co., Prudential Insurance, part of Prudential Financial Inc., and the California Department of Transportation.
The bulk of Western Digital’s workers moved from Lake Forest and south Irvine in December.
Some 400 workers remain in Lake Forest and Aliso Viejo and are set to move by year’s end.
Western Digital is set to have about 1,600 workers in Irvine. Roughly 1,300 workers already have settled in.
Some are meeting and interacting daily for the first time after being in different buildings, Salvi said.
What’s now Park Place has a spot in Orange County history.
For decades, the complex was known simply as the Fluor building, named for the engineering and construction services company that built it.
In 1999, Fluor Corp. moved to a campus in Aliso Viejo before relocating to Texas a few years back.
The five-building Park Place, now owned and managed by Irvine-based LBA Realty, was started in the late 1970s and completed in 1981.
The complex has a sort of 1970s airport vibe, a holdover from the Fluor days. There’s a cafeteria and a gym that are shared by tenants.
LBA Realty is undertaking efforts to update the decor and revamp some landscaping.
Perhaps Park Place’s most distinctive feature are futuristic looking, 93-foot tall towers that house air ducts and other ventilation for heating and air conditioning.
The complex’s Space Age looks have made Park Place the backdrop of movies, including 1991’s “Defending Your Life” with Meryl Streep and 1993’s “Demolition Man” with Sylvester Stallone.
Prior
Before moving to Lake Forest, Western Digital was in a high-rise office building in the Irvine Spectrum that was known to many as the Western Digital building.
The company looked at a few local cities for its recent move, including Mission Viejo and Tustin. It never considered leaving the area, according to Salvi.
“We never played that card,” he said. “This is where Western Digital was founded and this is where it stays.”
