The seemingly inexorable downward spiral of the computer hard disk drive market took its latest turn yesterday as increased market competition forced Western Digital Corp to announce that it will axe 439 staff from its manufacturing facility in Singapore. The Irvine, California-based company said the cuts, which will leave 4,100 staff at its Chai Chee plant, were part of a pre-planned series of production layoffs. Along with other hard drive industry leaders, Western Digital took the action of substantially reducing production over the last three quarters in its desktop business, the company said in an official statement. It added that the latest reductions were in response to excess production and unusually competitive pricing pressures affecting the global hard drive industry. Western Digital’s story is all too familiar. In January, decreasing demand for its hard drives contributed to Seagate Technology Inc’s $128.5m third quarter loss. Last month, stiff competition in the market forced Singapore-based Micropolis Ltd into liquidation, leaving debts totaling $376m. And Read-rite Corp, the Californian manufacturer of recording heads for disk and tape drives, issued a profit warning for the first quarter of this year, citing reduced shipments as the main cause. Earlier this week, Western Digital announced that it would license IBM Corp’s magnetoresitive head technology for use in its future hard disk drives. The company, which had previously been criticized for its slow adoption of MR drives, claims the IBM deal will enable it to convert 80% of its business to the technology by the next quarter. It hopes to increase the figure to 90% by September.
