Rumor about Western Digital ceasing some of its operation in Malaysia has finally come true.

The world’s second largest hard disk manufacturer confirmed it will close its factory in Sama Jaya Free Industrial Zone (SJFIZ), Sarawak and stop its operation effectively on March 2009.

All of 1,500 employees are set to lose their jobs in what appeared to be a sad ending for the company which has been operating for more than a decade. The company has been producing over 100 million hard disk drives annually through its Sarawak operation.

The 1,500-strong employees, which are mostly local, are made up of engineers, technicians and support staff.

The Sama Jaya Industrial Zone is located some 8 kilometers outside of Kuching, is a modern industrial park and is regarded as the state’s key industrial area in the development of high-tech industry. Western Digital was one of the major presences in the SJIZ, before the decision to stop operating. Apart from Sarawak, the company has other facilities based in Selangor, Johor and Penang.

Chrysler employees in the United States will be going for a very long Christmas holiday this year after the company decided to shut down all of its 30 factories for at least one month.

More than 45,000 union workers will be affected with the decision.

As the car sales in America as well as in other regions continue to plunge, the shut down is seen as a sensible move but it still could not eliminate the worry that it would eventually file for bankruptcy.

US suffered its lowest sales of vehicles in 26 years, with Chrysler becoming one of the worst hit victims, seeing its sales down by close to half, when the overall industry decline stands at lower rate, 37%.

Apart from the slow demand, Chrysler is also having a big problem in its lending arm, which has been giving so much loans to its auto dealers that a big chunk of it would possibly not be recovered, sending the company faster into the pool of bankruptcy. But stopping access to loan and funding will create another dilemma – only a few dealers would be able to order new vehicles, and demand would be worse.

Chrysler has been implementing a string of cost cutting strategies in its effort to stay afloat. In November, it cut about 5,000 jobs through buyout and implemented early retirement program for its staff. More temporary and contract positions will also be eliminated soon.

Western Digital Corp, a specialist in hard disk production, will cut 2,500 jobs across its worldwide operation, as well as stopping production for a number of weeks as orders for its products continue to go downhill.

The company will be closing one of its 3 hard drive factories in Thailand, and is looking at the possibility of closing or selling one of 2 factories operating in Malaysia.

Western Digital owns a facility in Sungei Wei, Selangor, and another in Kuching, Sarawak, with a combined workforce of over 8,000. The second facilities in Sarawak are expected to be affected by the major layoff move, with more than 1,000 staff to face possibility of retrenchment.

The job cut represents some 5% of its total workforce.

Between 20 December and 1 January 2009, the company will halt its manufacturing operations and cut down the manufacturing hours by some 20%.

It will also eliminate contract and temporary workers to cut expenditures, as well as implement job cuts for a range of its executives, including the Chief Executive Officer, John Coyne. Board of directors and other members of senior management will also be hit with job cut.

Western Digital is the world’s second largest hard disk drive producer behind Seagate Technology. Just like Western Digital, Seagate also plans to exercise worldwide shutdowns for some of its facilities in order to cut cost.