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Technology Stocks : Seagate Technology -- Ignore unavailable to you. Want to Upgrade?

To: Lynn who wrote (7354)	11/17/1999 9:04:00 AM
From: DJBEINO	Read Replies (1) \| Respond to of 7841

Western Digital Cuts 950 Jobs in Singapore, Adds Malaysia Jobs 11/17/99 2:14:00 AM Source: Bloomberg News Singapore, Nov. 17 (Bloomberg) -- Western Digital Corp., the world's No. 3 computer disk-drive maker, said it will cut a further 950 jobs, or 56 percent of its Singapore workforce, as it moves all its manufacturing operations to neighboring Malaysia to trim costs. The job losses and shift of manufacturing operations are expected to be completed by the end of January, and will result in a one-time charge of $30 million for the quarter ending Dec. 31, the Irvine, California-based company said. It's the second time in three months Western Digital has cut jobs in Singapore to concentrate its business in Malaysia. ''Fundamentally, our objective is to make ourselves the low- cost producer in the drive business,'' said John Coyne, vice president of Western Digital's Asian operations. ''In looking at plant utilization, demand versus capacity, we determined that we could more efficiently satisfy the demand on one site.'' Western Digital needs to cut costs, analysts say, after losing money in the past eight quarters, hurt by price cuts as competition grew more intense. The company said it will move equipment from its Singapore factory to an existing plant near Kuala Lumpur, Malaysia, and hire about the same number of workers there as it cut in Singapore, suggesting the Malaysian plant isn't operating at full capacity. In August, Western Digital said it would reduce its Singapore workforce to 1,700 from 2,500 as it moved the manufacturing of lower cost drives for desktop computers to Malaysia. The latest move will bring the manufacturing of higher-end drives for business servers, bought by corporate customers, to Malaysia, Coyne said. Of the 750 workers left in Singapore, 700 will be in customer service with the rest in areas such as design, Coyne said. Malaysian Export Boost Western Digital's production shift from Singapore is good news for Malaysia's economy. Manufactured goods, largely electronic components including disk-drives, make up 80 percent of the country's exports. Increased factory output and exports this year helped pull Malaysia out of recession in the second quarter of this year. It's another blow for Singapore, though, which churns out half of the world's computer drives and dubs itself the global disk-drive capital. It may also make companies such as Seagate Technology Inc., Maxtor Corp. and other disk-drive makers reevaluate their operations and future investments on the island, analysts say. Daiwa Institute of Research (Singapore) estimates Malaysia's labor costs are about a third of Singapore's $13,671 per worker a year. Factory space costs are also far lower, with those in the Malaysian capital, Kuala Lumpur, between a quarter to half of Singapore's. Further job cuts at Singapore disk drive facilities have been expected for some time, and come in the wake of losses after heavy price cuts in the industry. Prices for low-end disk drives have been slashed by half to about $75 a unit, analysts estimate.