Spansion cuts 3000 jobs to save $225M
The majority of the layoffs, representing 35% of Spansion's staff, are at the flash maker's global manufacturing sites.
By Suzanne Deffree, Managing Editor, News -- EDN, February 24, 2009
The changes continue at Spansion Inc. Less than a month after naming a new CEO as part of its restructuring and exploration of business model alternatives that include a sale or merger, the company this week announced it will cut 35% of its workforce.
The majority of the layoffs, affecting approximately 3,000 employees, are at the flash maker's global manufacturing sites. The Sunnyvale, Calif-based company said it made the decision to cut staff as it "resizes" due to current market conditions.
The memory segment has been hit hard during this downturn. Falling ASPs (average selling prices), lower demand, and oversupply greatly damaged suppliers' growth in 2008. Indeed, DRAM maker Micron also announced it would cut jobs within its manufacturing operations this week, saying up to 2000 employees would be laid off as it exited 200-mm production in Idaho.
"The global recession is forcing us to make this very difficult decision in order to bring our costs in line with the current expectations for significantly reduced revenues," said John Kispert, Spansion new president and CEO, in a statement. "This action was not undertaken lightly given its impact on our employees and their families. However, we have a responsibility to preserve the value of the enterprise as we pursue our goal of positioning Spansion for a recovery through a restructuring and/or sale."
Kispert was appointed president and CEO earlier this month. The former president and COO of KLA-Tencor replaced Bertrand Cambou at Spansion one day after his resignation.
Spansion said it expects that, when complete, the massive layoff will result in approximately $25 million in cash charges, during the first half of 2009. The company believes this reduction in force will provide it with annual cash cost savings of approximately $225 million.
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jim short - 2009-25-2 11:36:00 PST -
From Statesman.com:
Spansion restores executives to full pay
By Kirk Ladendorf | Tuesday, February 24, 2009, 11:10 AM
While Spansion Inc. was cutting 35 percent of its workforce, or 3,000 jobs on Monday, the company’s board was restoring full pay to its top executives.
The company had imposed a 10 percent pay cut last Oct. 6 for top executives. But in a securities filing, it said it was returning the executives to full pay as part of an “employee retention program.”
Laid-off Spansion workers told the American-Statesman Monday that they received no severance pay. Spansion employed about 1,200 workers in Austin before Monday’s cuts.
Workers said they were told the company will pay part of their health insurance costs for the next several months.
The company said the downsizing would cost it $25 million, but would save it $225 million in reduced operating costs over the next year.
Workers noted that former CEO Bertrand Cambou was paid a full year’s base salary (just over $751,000) plus a four-month consulting fee when he resigned suddenly at the end of January.
Spansion is seeking a buyer as it fights a worldwide glut and falling prices for flash memory chips.
bruce mcdaniel - 2009-24-2 14:31:00 PST
