As you most likely are aware, we are experiencing a downturn in our market— it’s now approximately 15 percent lower than we had anticipated in March of this year. As a result, our volumes and revenue now are lower by approximately that same proportion. Although we believe the market has settled for the next several quarters, it is essential that we make adjustments to our business to remain competitive.
As Jim Murphy mentioned in the recent WD All-hands meeting, we quickly must act to protect our core business, which includes Notebook, Desktop, Network Attached Storage (NAS), and Surveillance. To achieve better returns on our investments, we must focus on our investments in growth areas that have considerably more certainty such as MyCloud, and select datacenter customers where we are profitable.
At this point, we have streamlined our roadmap to focus on “must execute” programs, including shingled magnetic recording (SMR), and in particular, growth areas within the core, such as:
• Low-platter count Raid Edition (RE)
• Surveillance
• Network Attached Storage
• Enabling solutions for select datacenter customers
• Leveraging “Purple” Network Video Recording HDDs drives into datacenters
Also, it is critical that the Content Solutions team keeps a laser focus on expanding the market by improving MyCloud’s ease-of-use and by extending usability across platforms.
To achieve this, although these are difficult decisions, we are aligning our business to these conditions by implementing fixed-cost reduction and headcount actions, which will vary by site. Actions across all the Manufacturing Operations sites should be completed by mid-October.
We understand that these measures can result in anxiety and stress for employees, and we are taking all possible measures to minimize disruption and remain a healthy and profitable business in the long-term.
We have a strong, resilient, and excellent team, and must leverage that strength as we, in Steve Milligan’s words, “focus on those areas that we can influence, and do the best job possible.”
I appreciate your support in this effort. If you have questions, please discuss them with your manager or your functional leadership team.