Spansion Slashes 3,000 Jobs in Bid to Cut Costs
Flash memory chip maker Spansion plans to lay off more than 3,000 employees to cut costs as it fights the global recession, the company said Monday.
Spansion is one of several chip makers battling to survive as global chip sales falter. German DRAM maker Qimonda filed for bankruptcy last month but continues to seek new operating funds, while Taiwan's ProMOS Technologies faces a possible showdown with creditors over a US$350 million bond that it cannot repay in full.
Spansion estimates it will save about $225 million this year from the workforce reduction, but will have to pay $25 million in charges in the first half of this year as a result of the layoffs.
"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 Spansion CEO John Kispert in a statement.
Earlier this month, Spansion's former CEO, Bertrand Cambou, resigned as the company sought a possible sale or merger to raise funds to pay off interest on debt that has come due. A week later, Spansion Japan filed for bankruptcy protection.
The global chip market has been hit hard by the recession.
Worldwide chip revenue is expected to fall 20 percent year-on-year to $199.2 billion this year, according to In-Stat. Industry revenue won't return to 2007 levels until at least 2012, the market researcher added.