Western Digital is to cut 2,500 jobs, or about 5 per cent of its global work force, and will reduce executive pay as a result of the global economic situation.

Citing weakening demand for its products, the hard drive maker the company now expects fiscal second-quarter sales of USD $1.7 billion to $1.8 billion, with a "consequent reduction in operating results."

Western Digital said demand for the current quarter is "significantly below" what it expected when it issued revenue guidance in October.

Previously it sales outlook was USD $2.03 billion to $2.15 billion.

The company plans to reduce compensation by an unspecified amount for its executive officers, board of directors and senior management.

Manufacturing operations will cease from December 20 through January 1 and manufacturing hours will be reduced by 20 per cent through employee attrition and reduction in the use of temporary workers and overtime shifts.

It is also closing one of its three hard drive factories in Thailand and will close or sell one of two facilities in Malaysia.

The measures, expected to be completed by the end of March, are expected to save about USD $150 million a year. Western Digital expects to take related charges of USD $150 million in the fiscal second and third quarters.

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