Updated from July 13

Warning of a sharp second-quarter earnings shortfall, Imation ( IMN) rolled out plans to slash its workforce by 10%. Its shares plunged 21% Wednesday.

The Oakdale, Minn., maker of storage media said pricing pressure in its optical media business punished latest-period results. Rushing to trim overhead, the company said it would close its Tucson, Ariz., plant, affecting 280 jobs.

Imation said second-quarter earnings will come in at around 20 cents a share, which is far short of the 51-cent Thomson First Call consensus estimate. The company projected revenue of $284 million for the period ended June 30, which again is far short of the $318 million target.

The company also set a $9 million inventory writedown, citing overcapacity. "While our optical revenue continues to grow, significant additional manufacturing capacity in Asia has now come on line primarily for recordable DVDs, resulting in aggressive pricing across the industry," operating chief Frank Russomanno said. "This was coupled with softer than expected demand for recordable optical media generally. We are taking necessary actions to reduce our inventory exposure and position the business going forward."

That said, Imation sought to focus on the positive. "Our core magnetic tape media business is meeting our expectations and performing well and we expect overall revenue growth for the full year," CEO Bruce Henderson said. "The actions we are announcing today are important steps to increase our competitiveness, extend our market and technology leadership and strongly position us for the future. Even though we did not provide specific guidance for the second quarter, in the interest of greater transparency we recognize the importance of updating the financial community at this time and will update our full year outlook when we release earnings next week."

On Wednesday, Imation sank $8.48 to $31.84.