Feeds

Creative to axe 500 staff, shut US plant

Desperate times call for desperate measures

  • alert
  • submit to reddit

High performance access to file storage

Sound card supremo Creative Technology is to cut ten per cent of its worldwide workforce and shut US manufacturing plant in a desperate bid to cut costs.

Blame the economic downturn, the company said, as it announced the closure of its factory in Malvern, Pennsylvania, which it acquired in 1997 when it purchased Ensoniq. Production will be transferred to Creative's Singapore facility.

Creative also announced it will be making "sharp cutbacks" in "non-revenue generating" Internet operations, which suggests that non-core businesses like online music provider Oozic.com and audio e-tailer hifi.com - Creative's only Net subsidiaries - may be contributing to the job cuts too.

All of which will cost the company between $15 million and $20 million, to be taken on the nose in a single quarter as a one-off charge. The company's third quarter is due to end on 31 March. Creative still believes its quarterly revenue will come in at $260-270 million, down from $330 million this time last year and well down on last quarter's $427 million. Q2 yielded earnings of $26.5 million, which, once you've taken into account the quarter's drop in sales, won't leave much from which to subtract $15-20 million in redundancy payments.

Creative said it also plans to "take a write-down during the current quarter of approximately $65 million against its investment portfolio", thanks to the recent collapse in hi-tech stocks. ®

Related Story

Creative forecasts Q3 sales drop

High performance access to file storage

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
prev story

Whitepapers

Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.