According to Yun Toutiao, as a Fortune 500 company in the United States, data storage giant Western Digital will lay off more than 300 employees in California in May this year.
The San Jose, California-based company is known for producing disks and flash storage drives. According to three WARN notices submitted to California authorities, Western Digital disclosed last week that the company would lay off 313 employees. The Employee Adjustment and Retraining Notification Act (WARN) notice requires employers to notify state authorities in the event of mass layoffs.
According to three separate documents submitted to state authorities, Western Digital's layoffs are expected to begin on May 7 and will affect operating sites in San Jose, Milpitas and Irvine. The layoffs will affect positions such as chief engineer, financial supervisor, firmware engineering supervisor, senior director of sales operations, vice president of business development, and vice president of talent recruitment.
According to documents submitted on March 6, 76 employees in San Jose, 114 employees in Milpitas and 102 employees in Irving will be affected.
Steve Shattuck, a spokesperson for Western Digital, said in a statement to the IT foreign media CRN that in response to the “changing industry, we are evaluating and transforming our business to ensure that we create value for our customers and shareholders and maintain our role. The competitiveness of data technology leaders. Appropriate streamlining and restructuring of the company is part of our response to this evolving industry."
Shattuck said the layoffs are "part of a restructuring action that affects employees in various functional departments in several regions around the world. Employees affected by this action have been notified."
Shattuck did not specify how many employees worldwide were affected by the layoffs. According to a document submitted to the US Securities and Exchange Commission, as of June 29, 2018, Western Digital employed a total of approximately 71,600 employees worldwide.
In January this year, Western Digital announced that its revenue for the most recent quarter ended December 28, 2018 was US$4.2 billion, but its net loss was US$487 million.
At the time, CEO Steve Miligan said in a statement, "We are taking action to align our cost and expense structure more with the short-term business situation, while continuing to provide innovative solutions to promote our future success."
In August last year, Western Digital President and Chief Operating Officer Michael Cordano told CRN: “We are convinced that R&D is the main factor driving the development of technology and products. We will continue to invest in hard drives, flash memory and other products in a very purposeful way.”
Western Digital's business model has undergone changes in the past few years, from focusing on components such as hard drives and SDDs, to focusing more on storage systems. This includes the acquisition of storage system manufacturer Tegile Systems in 2017 and the acquisition of Virident Systems in 2013.
As of Tuesday night, Western Digital's stock price has plummeted 51.74% in the past 12 months, falling to $49.15 per share.
This is not the first time Western Digital has undertaken large-scale layoffs.
At the beginning of September 2017, the storage plant of Western Digital's Yuke Global (HGST) located in Pingshan, Shenzhen entered the suspension of production and liquidation.
Yuke said, “This transformation requires us to make some challenging but important decisions, including optimizing the use of our large manufacturing sites across Asia.”
Public information shows that Yuco was established in July 2004 and is a wholly-owned subsidiary of Yuco Global, a subsidiary of Western Digital. It is located at No. 1 Jinxiu West Road, Shenzhen Export Processing Zone, Pingshan New District. It is responsible for manufacturing, processing, developing, producing, selling large-capacity disk drives, storage devices and their components, and providing after-sales service. In the export processing zone, it provides guarantee, support and logistics services for the products and equipment manufactured or sold in the HGST Group worldwide or under its name.
Analysts pointed out that as the faster-reading solid-state drive (SSD) is gradually expanding the market and seizing the share of the mechanical hard drive (HHD), this is a major measure taken by Western Digital to respond to industrial development.
According to statistics, from 2011 to 2015, SSD shipments increased from 14.6 million to 102 million, an increase of nearly 700%; while shipments of mechanical hard drives dropped from 621.5 million to 468.9 million, a decline It reached 24%.
At the same time, the price of SSDs has been declining in 2018, and basically achieved a price of 1 yuan for 1GB. Even the current price of some 500G SSDs has fallen below 400 yuan.
The continued price decline has also further stimulated players’ demand for SSDs. In 2018, global SSD shipments reached 205 million, an increase of 31% compared to 2017, of which the consumer SSD market shipments reached 176 million. Falling prices are stimulating the continued growth of market demand, and the market share of mechanical hard drives will therefore take another half step.
When an industry falls, a new industry is bound to rise.
Judging from the current storage market, the price of SSD is constantly decreasing, and the capacity is almost the same as HDD (mechanical hard disk), but in terms of performance, the former can almost completely explode the latter:
Faster reading speed: The reading speed of SSD can reach 400M/s, and the writing speed is also above 130M/s, which is 3-5 times that of mechanical hard drives;
Anti-vibration ability: The traditional mechanical hard disk has a high-speed rotating head inside, and its anti-vibration ability is very poor. Therefore, if the general mechanical hard disk is used in motion or vibration, it is easy to damage the hard disk. The SSD adopts a chip storage solution, has no internal magnetic head, and has super shock resistance. Even if it is used in motion or vibration, it is not easy to damage;
Power consumption: SSD has low power consumption and has a very low-power standby function, while mechanical hard drives do not;
Noise: Basically no noise can be heard during SSD operation, while mechanical hard disks generally can hear the internal disk rotation and vibration when listening closely. Some mechanical hard disks with longer use have more obvious noise.
Fever: SSD has better heating performance, and no obvious heating can be felt on the surface after operation, while after a period of operation of mechanical hard disk, it can be obviously felt hot when touched by hand.
In fact, SSD has simpler results than mechanical hard drives, mainly composed of master control plus flash memory, and flash memory is undoubtedly the core part of SSD. At present, the world's largest storage manufacturers such as Micron, Toshiba, Samsung, and Hynix have become flash memory. The main players in the market.
In order to resolve this contradiction, Western Digital did not hesitate to purchase Sandisk and become an important player in flash memory manufacturers.
On this issue, as a global storage giant, Ms. Sun Dan, Seagate's global vice president and China president, is more optimistic.
"It is undeniable that the market for SSDs in personal consumer electronics such as notebooks is indeed growing faster than HDDs, but this market is relatively limited, and technology changes are also rapid. In the future, HDDs and SSDs will develop synergistically. For example, In the security industry, there is a huge amount of unstructured video data. Based on factors such as cost, HDD will still be Party A’s preferred storage solution with an advantage in total cost of ownership." Sun Dan said.
She stated that if one day, the cost of SSD can be controlled to be the same as that of HDD, there is no doubt that it will be replaced by then, but from the current technological development, this day will take a long time.
Although Seagate supports HDD in terms of technology and business layout, this does not mean that Seagate will give up SSD entirely.
Sun Dan revealed that Seagate is also gradually making efforts in the SSD business. Seagate participated in a consortium led by Bain Capital with US$1.27 billion in cash last year, signed an agreement with Toshiba to acquire Toshiba Memory Corporation, and signed a long-term agreement with Toshiba to consolidate the supply of NAND flash memory. At the beginning of this year, Seagate will have more comprehensive and optimized SSD products available.
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