Feeds

Anatomy of a chipmaker meltdown

AMD's Spansion sued after juicing exec pay amid mass layoffs

Top 5 reasons to deploy VMware with Tegile

AMD flash-mem spin-off Spansion has been hit with two separate employment lawsuits after unexpectedly laying off 35 per cent of its workforce earlier this week.

Both suits - Refuerzo v. Spansion and Rubaker v. Spansion - were filed yesterday in the United States District Court for the Northern District of California. Both accuse the company of violating the Worker Adjustment and Retraining Notification (WARN) Act - a twenty-year-old US law that requires employers to provide 60-days notice before making "mass layoffs."

"By all the information we've gathered so far, the numerical requirements for a mass layoff under the WARN Act have been easily met," Kenneth Sugarman, the lawyer backing the Refuerzo suit, tells The Reg. "Employees should have been given 60 days notice before the layoffs, but they were not."

When we contacted the company, their primary spokesperson told us she was unaware of the lawsuits but that she "believed" the company had an exception under the WARN act. Two hours later, she provided the following statement: "We are aware that a class action lawsuit has been filed, though the company has not yet had an opportunity to review it. Nevertheless, we believe there are exceptions to WARN requirements which the company meets. The company will not comment on any of the details of any defense it may have, but will wait for a court to determine."

The company says it did not notify the US Department of Labor about the layoffs until the day they happened.

A joint venture of AMD and Fujitsu, Spansion manufactures so-called NOR flash memory for cell phones and cars. The company is the world's third-largest flash maker, behind Samsung and Toshiba, but NOR is significantly less popular than the NAND flash chips manufactured by the two tech giants - especially now that the US car industry has buckled under the weight of a failing economy.

In September, according to former employees speaking with The Reg, the Sunnyvale, California-based Spansion slashed employee pay, cutting certain execs' checks by 10 per cent and others by 5 per cent. And three months later, it lopped another 15 per cent from the checks of many non-execs, employees say. Then on January 2, an estimated 500 employees at the company's headquarters and Sunnyvale R&D lab were placed on unpaid furlough.

Initially, this was described as a one-month leave. But on January 15, the company told the world that it was working to restructure its balance sheet - and possibly sell itself - after struggling to keep up with debt payments. Then on January 31 the company told furloughed employees that their leave had been extended for another two weeks.

The furlough was then extended a second time. Furloughed employees were due to return in March, but on February 23 the company announced 3,000 worldwide layoffs - and it appears that this included all furloughed employees. Multiple former employees have told The Reg they were notified by phone.

"I was laid off over the phone by someone who wasn't my manager," says Ian Dudley, a manufacturing engineer in the company's R&D lab. "My manager had already been laid off."

Beginner's guide to SSL certificates

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
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
Vodafone to buy 140 Phones 4u stores from stricken retailer
887 jobs 'preserved' in the process, says administrator PwC
prev story

Whitepapers

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.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.