WD Will Reduce its Workforce by 800 Employees

Western Digital announced today that the majority of its media
and substrate supply obligations to external customers related to its
acquisition of Komag in 2007 will be fulfilled by May 2008, as planned, and
that consequently WD will streamline its media and substrate operations to
serve only its own hard drive business.

As part of the realignment of media manufacturing resources, the company
will focus its Penang, Malaysia facilities solely on the production of
magnetic media, while substrate plating and polishing operations, currently in
Penang, will be consolidated into the company’s two other Malaysian substrate
facilities in Kuching and Johor Bahru, maximizing operational efficiencies.

Additionally, some positions in the company’s San Jose, Calif. development and
media operations facility will be affected with the cessation of external
business. As a result of these actions, WD will reduce its labor force by
approximately 800 employees — approximately 770 in Malaysia and approximately
30 in the United States — representing less than 2 percent of the company’s
total worldwide employee population of approximately 42,500.

The total cost of these actions is currently estimated to be approximately
$16 million, including termination benefits and asset impairment charges. The
portion of these costs, if any, that will be charged against the company’s
third quarter operating results and the portion, if any, that will be
reflected as an adjustment to the Komag acquisition purchase price allocation
is still being determined and will be separately disclosed during WD’s third
quarter earnings release conference call in April. This realignment is
consistent with the integrated media operations business model guidance
previously provided by the company.

Don Blake, vice president and general manager, WD Media, said, "This
action sizes our media and substrate operation to the current demands of a
single customer — WD’s hard drive business. It efficiently streamlines our
media and substrate operations while enhancing focus on the development of
future manufacturing technologies to support media and substrate requirements
resulting from continued success in our hard drive business."

Western Digital