1,500 in Sarawak to lose jobs with closing of Western Digital plant

1,500 in Sarawak to lose jobs with closing of Western Digital plant
KUCHING, Dec 20 — The decision by Western Digital, the world's second-largest hard-disk drive manufacturer, to close its Sarawak plant in the Samajaya Jaya Free Industrial Zone (SJFIZ) here due to the global economic meltdown will affect 1,500 workers, state Assistant Minister for Industrial Development Datuk Daud Abdul Rahman said today.

He said officials from the company, formerly known as Komag USA (M) Sdn Bhd, had confirmed that the United States-based investor, was not only retrenching all its workers but also closing down its operation here as it was no longer economically viable.

"It is sad that the state government was not informed of the abrupt decision in advance (until my ministry decided to call Western Digital officials for a meeting today) because we are sympathetic to the plight of the workers, who were only being given a last-minute notice through a video conferencing with the chief executive officer last week," he told a media conference here.

Earlier he met with Western Digital Media (Malaysia) Sdn Bhd senior director Keong Chan and its human resources director Saiful Bahri Sopar at his office in Petra Jaya here.

He said the affected workers, all locals, including 500 engineers and technicians accounted for 10 per cent of the 15,000 workers in the electronics industry at SJFIZ.

Following the discussion, the state government had requested that the company downsize its operation in stages until March besides providing alternative employment opportunities for those willing to move to its plants in Johor, Kuala Lumpur or Penang, Daud said.

He said Western Digital's “fast” decision to close down its Sarawak plant, which produced 30 million units of hard-disk drives per quarter, was due to the 50 per cent drop in global demand, making it the company's first operation in the country to be affected by the current economic situation.

"We are very disappointed because the state government has spent billions of ringgit, in terms of providing infrastructure and cheap land as well as facilities, including water supply to the company because we thought that they will stay here permanently," he said.

"Of course that is their decision economically. As a listed company on the New York Stock Exchange, they want to see their company make dollars and cents but at same time they must consider the contribution of their workers from each country which contributed to the rise in their stock market shares or profits," he said, adding that laying off workers should not be the first option.

He hoped that it would not have a domino effect and requested other companies to refer to the state government first of their plans to close down their plants to enable the welfare of the workers to be looked after, including re-training them.

"The government, through his ministry, wants to assist the affected workers and I will talk to company CEOs in the coming weeks to see if they can be absorbed into alternative jobs, such as the hospitality industry," he said.

However, he said, Western Digital had given an assurance that all its workers who had lost their jobs would be given retrenchment benefits or be given the option to work in its plants in the peninsular.

He said the company planned to sell its plant here, which first started operation 13 years, while another one in Thailand was expected to be closed soon.

According to a news report, Western Digital Corp planned to cut 2,500 jobs or five per cent of the workforce and halt most of its production after orders slowed.

Sales in the current quarter were also projected to be US$1.8 billion (RM6.3 billion), less than the US$2.03 billion or more predicted on Oct 23. — Bernama