US hard drive maker to cut 2,500 jobs

"In the current macro economic climate, we expect demand weakness to last well into the middle of the 2009 calendar year," president and chief executive officer John Coyne said.

"Consequently, we are taking additional steps to immediately reduce production capacity and operating expenses on a longer-term basis across our entire business."

Western Digital lowered its revenue outlook for the quarter ending on December 26 to 1.7 billion dollars to 1.8 billion dollars from the previous guidance of 2.025 billion dollars to 2.150 billion dollars issued in October.

Besides reducing its workforce by five per cent, Western Digital said it was reducing the compensation of the executive officers, board of directors and senior management of the Lake Forest, California, company by an unspecified amount.

It said it was closing one of its three hard drive manufacturing facilities in Thailand and another manufacturing facility in Malaysia.

Western Digital said it expected the moves, to be completed by the end of March, to result in annual savings of 150 million dollars.

Western Digital shares were trading at 12.70 dollars at 2000 GMT in New York, a gain of 1.60 per cent on the day.