Western Digital Forced to Retrench

Storage firm Western Digital(WDC Quote) is cutting 2,500 jobs, or 5% of its workforce, as the company attempts to cope with weakening demand for its hard drives.

The Lake Forest, Calif., company also lowered its second-quarter revenue guidance from between $2.025 billion and $2.15 billion to a range between $1.7 billion and $1.8 billion. Analysts had estimated revenue of $1.98 billion.

"In the current macroeconomic climate, we expect demand weakness to last well into the middle of the 2009 calendar year," explained Western Digital CEO John Coyne, in a statement released Wednesday. "Consequently, we are taking additional steps to immediately reduce production capacity and operating expenses." ...