Feeds

Creative to axe 500 staff, shut US plant

Desperate times call for desperate measures

  • alert
  • submit to reddit

Secure remote control for conventional and virtual desktops

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

New hybrid storage solutions

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Apple Pay is a tidy payday for Apple with 0.15% cut, sources say
Cupertino slurps 15 cents from every $100 purchase
Forget silly privacy worries - help biometrics firms make MILLIONS
Beancounter reckons dabs-scanning tech is the next big moneypit
Microsoft's Office Delve wants work to be more like being on Facebook
Office Graph, social features for Office 365 going public
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Top 5 reasons to deploy VMware with Tegile
Data demand and the rise of virtualization is challenging IT teams to deliver storage performance, scalability and capacity that can keep up, while maximizing efficiency.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.