SanDisk to cut 15 per cent of its staff
Print450 will get the flash flush
Posted in Financial News, 6th November 2008 11:04 GMT
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SanDisk is making 15 per cent of its 3,000-strong world-wide workforce redundant as it struggles to cut costs. That means 450 people are heading out of the door.
There is chronic over-supply in the flash memory market with consistently falling prices. The current recessionary world-wide economic circumstances are exacerbating this and postponing any recovery in the flash market.
On Tuesday SanDisk revealed worse than expected quarterly losses of $155m with sales down 21 per cent to $821m compared to the year-ago quarter. The previous quarter also showed a loss of $68m.
SanDisk is cutting its 2008 capital expenditures in the light of its dire situation from $2.4bn to $1.9bn, reducing to $1.3bn in 2009.
It has informed its 700 employees in Israel that a considerable number of them will lose their jobs. A 15 per cent cull would mean 105 jobs would be lost there.
Our information is that SanDisk Israel fired 40 people in May.
SanDisk made 100 people redundant last year, following the $1.5bn acquisition of M-Systems in mid-2006 in order to increase business efficiency.
The company was recently the target of a near $6bn takeover attempt by Samsung which collapsed when Samsung refused to raise its offer as SanDisk wanted, citing SanDisk's depressed share price. SanDisk earns about $400m a year licence revenue from Samsung and, during the bid, Samsung threatened legal action to cut this.
SanDisk announced its ExtremeFFS technology yesterday to increase random write speeds to flash memory by up to 100 times.
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