Western Digital is being split into separate disk drive and NAND/SSD businesses, and CEO David Goeckeler will head up the latter.
Western Digital, under activist investor engagement from Elliott Management, has decided to separate its constituent HDD and NAND flash and SSD supply units. Elliott believes this will increase shareholder value as the NAND side of the business is undervalued. The company has issued a split progress report release saying Goeckeler is the CEO designate for the HDD business, and Irving Tam, EVP Global Ops, will step into the CEO role for the standalone HDD company, which will continue operating as Western Digital.
Goeckeler said: “Today’s announcement highlights the important steps we’re making towards the completion of an extremely complex transaction that incorporates over a dozen countries and spans data storage technology brands for consumers to professional content creators to the world’s leading device OEMs and the largest cloud providers.”
He added: “The flash business offers exciting possibilities with market growth potential and the emerging development of disruptive, new memory technologies. I am definitely looking forward to what’s next for the spinoff team.”
Industry analyst Jim Handy blogs: “I had been expecting for Goeckeler to follow the HDD side of the business, which remains quite healthy despite almost two decades of flash manufacturer predictions for HDDs to vanish as they were replaced by SSDs, a position that I never embraced.”
There are two execs currently leading the HDD and NAND/SSD business units – Ashley Gorakhpurwalla, who is EVP and GM for the HDD business, and Robert Soderbery, EVP and GM of the flash business. Their roles in the split businesses may need redefining.
Tam wasn’t quoted in the release, but Goeckeler commented: “Since joining Western Digital two years ago, Irving has made a tremendous impact on the transformation of our global operations organization and plays an integral role in running our HDD business. He leads with global perspectives, diverse insights and deep industry expertise and I have full confidence in him as Western Digital’s chief executive when the separation is completed.”
The announcement notes that Western Digital’s separation teams are establishing legal entities in the 18 countries where operations are located, preparing independent company financial models, finishing final preparations for SEC and IRS filings, conducting a contract assignment process for global customers and suppliers, and designing company-wide organizational structures for both companies.
