WD Managers,
Below are several frequently asked questions (FAQ) and answers for your convenience, should employees have questions or need clarification on the recent actions.
1. Why did we have a Reduction in Force?
A. Western Digital regularly evaluates its organizational strategy in order to keep abreast with global market changes and maintain operational excellence. The organization has engaged in an OpEx reduction program to reduce our quarterly OpEx spend in line with an increasingly challenging market environment. We must engage in a series of actions aimed at:
a. Revenue retention
b. Organizational efficiencies
c. Increasing business performance by segment
d. Minimizing spend on projects that have low ROI potential
e. Delivering the expense reductions through both full-time employee (FTE) and non-FTE actions.
2. Will there be more reductions after mid-October?
A. We are all obligated to explore ways to maximize efficiencies in processes and reduce cost in our operations and our products. As a company, we can never make the commitment that future reductions in force will not be necessary. However, we do understand the anxiety these actions cause, and will do everything we can to ensure we take the minimal number of actions.
3. Does this mean we won’t be hiring?
A. We are continuing to invest in growth areas of the business, and although we currently have curtailed hiring (with some exceptions), all new hire requisitions will be evaluated by the senior leaders and Jim Murphy. Exceptions may be made to ensure the continued success of our business initiatives, especially in our target growth areas.
4. How were decisions made about which people would be impacted?
A. Functional leaders were asked to look at their business function to examine and refine their strategic objectives with the goal of reducing OPEX / COGS while increasing revenue and operating income. All groups considered their organizational structure and identified performance capabilities, critical skills, and roles needed to execute on these objectives.
This process resulted in identification of activities and roles that will no longer be performed, or will be reduced. Based on these assessments, management made decisions to retain those employees best suited for the needs of the business going forward. The decision to reduce the workforce is always difficult, and it was made carefully, strategically, and thoughtfully.
5. Will impacted employees receive ICP?
A. Impacted employees will receive 100% of target ICP payout as part of the severance package for the period in which they exit, prorated through their termination date.
6. Will impacted employees receive VIP?
A. Eligible employees on the VIP short-term incentive plan will receive an additional amount of severance in lieu of VIP. This amount will be equal to 100% of their Q1FY16 and Q2FY16 VIP target, prorated through their termination date.
7. What do I do if I get questions from our suppliers, vendors or press about the Reduction in Force?
A. Messaging to customers/vendors was prepared by Corporate Communications and must be strictly adhered to when communicating with customers. Steve Shattuck is handling company communications to our key customers, and his team will be cascading the communication to the rest of our customer base. If you need to inform a customer that a specific employee is no longer with WD, you may do so; however, the communication should be limited to letting the customer or vendor know that the employee is no longer with WD and the contact information for the new contact.
8. How does a US impacted employee apply for an internal job opportunity?
A. Impacted US employees were provided with a letter in their packet with instructions on how to access WD’s Internal Career Center externally. The letter will provide a special URL and user access to search for jobs as an internal candidate. Their access will expire after a specific period of time.
9. Can an impacted employee come back to WD as a temporary employee?
A. During the period covered by a severance and/or notice period, the employee may not come back to WD as a temporary employee. After that period, there is no policy preventing them from being placed at WD as a temporary worker.
10. What are the steps taken if an impacted employee recently filed a patent application?
A. Any inventor who is a current WD employee as of the date of patent application filing is eligible for the application filing award. The award is typically paid in the second paycheck of the second month following the patent application filing date. Impacted employees who are still on payroll at the time of the award will get paid through their regular paycheck. Impacted employees who are no longer with WD can expect payment through electronic transfer, manual checks or alternative means arranged previously when the award is paid out.
11. What are the steps taken if an impacted employee is named on an invention disclosure that is being evaluated or a patent application that is in the process of being prepared?
A. The regular process of evaluating invention disclosures and preparing patent applications will be followed. As appropriate, impacted employees will be contacted by the legal department to review drafts of the application, provide input, and sign formal papers related to the application after the separation. If the application is filed before the employee’s official termination date, the employee will be eligible for the application filing award. If you have any additional patent-related questions, please contact WD Patent Counsels Brendan Hanley (brendan.hanley@wdc.com) for Asia and David Chan (david.chan@wdc.com) or Don Pua (don.pua@wdc.com) for U.S. locations.
12. What can I do to get my team refocused and engaged?
A. As you know, we have either scaled down or discontinued areas in which we were attempting to penetrate a market, take market share, or develop a new market. We are concentrating on those areas where we know we will be successful going forward, such as our core offerings. We have had to make difficult decisions in redeploying or reducing headcount, and we believe that with our current workforce we will be in a good position to achieve our goals. Now, we must rely on each other to regroup, re-engage and execute the plan.