FOR IMMEDIATE RELEASE

READ-RITE LOWERS BREAKEVEN LEVEL THROUGH COST REDUCTIONS AND A REDUCTION IN WORKFORCE

FREMONT, CA � July 12, 2002 � Read-Rite Corporation (Nasdaq: RDRT) today announced that in an effort to reduce their breakeven level, they reduced their    worldwide workforce by approximately 500 employees, or 5% . Most of the employees affected were exempt/indirect employees. The reduction in force together with the other cost cutting measures are anticipated to have an annual savings of approximately $30 to $40 million.                                                                 

Read-Rite did not reduce any of its direct labor, so that it can smoothly ramp up production volumes when the 60-gigabyte and 80-gigabyte qualifications are completed. These cost cutting measures will allow Read-Rite to reach a cash and P&L breakeven level at a much lower revenue level.

The company is scheduled to release results for the third fiscal quarter ending June 30, 2002 after the close of the market on July 31, 2002 and will provide further information at that time. 

Read-Rite Corporation is one of the world's leading independent manufacturers of magnetic recording heads, head gimbal assemblies (HGAs) and head stack assemblies (HSAs) for disk drives and tape drives. The company is headquartered in Fremont, California and has operations in California, Thailand, the Philippines, Japan, Singapore and South Korea. The company's website is located at http://www.readrite.com.

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