Hitachi is shutting its hard drive plant in Mexico and is to delete 4,500 jobs.

The plant in Guadalajara will be purged by the middle of next year with production transfered to plants in the Philippines, China and Thailand. Hitachi expects to save $300m in costs with the division reformat.

The restructure will reduce Hitachi's global work force of 40,000 by 11 per cent. The remaining plants will specialize in certain key aspects of HDD manufacturing — creating what Hitachi calls "centers of competency."

Hitachi's plant in San Jose will remain largely unchanged.

Hitachi's HDD business - the world's third biggest - has struggled with four straight years of losses. The company faces dropping drive prices and fast-moving competition as well as possible turbulence ahead with a push for flash storage in the expanding market of portable computers.

Hiroaki Nakanishi, Hitachi Global Storage Technologies CEO, today said the business aims to increase sales by 40 per cent this calendar year.

"It will be a struggle against price falls, but we will aggressively push forward new products and cut costs to gain a profit," he told the press today.

Centralizing the component and final HDD-assembly facilities in China and Thailand will cut shipping costs and shorten production cycles, Hitachi said in a press release, advancing the company's "mega-manufacturing concept". ®