Sandisk axes 15 per cent of workforce

FOUR HUNDRED AND FIFTY of Sandisk's 3000 employees may be collecting their pink slips as the company desperately looks for ways to cut costs.

Israeli Sandisk employees were told by their management to prepare themselves for a wave of mass layoffs, and that the firm would be trimming its global workforce by some 15 per cent.

Sandisk employs just over 650 souls in Israel, spread out through centres in Kfar Saba, the Galilee in Israel’s north and the southern town of Omer.

Israeli staff was told the company was set for massive restructuring and “streamlining of projects” as the firm shored itself up to face the harsh economic climate. But, the credit crunch is not the only thing to blame. A glut in the flash memory market has caused prices to plummet, and this was reflected really clearly in Sandisk’s dire financial reports earlier this week.

The firm admitted its losses have grown for the second quarter in a row, with those in the third quarter totaling $155 million and sales down 21 per cent to $821 million compared to the year-ago quarter. Last quarter’s loss was $68 million, and the firm now says it will have to cut its 2008 capital expenditures from $2.4 billion to $1.9 billion, going down to $1.3 billion in 2009.

Rumour sweeping through the Israeli Sandisk sites has it that up to 105 jobs could go in Israel alone, a bitter blow after 40 people were laid off in May 2008.

Samsung Electronics recently decided to withdraw its $5.9 billion buyout offer because of the weak market and Sandisk's depressed share price. Now Sandisk founder and CEO, Eli Harari, has warned he has been left with no choice but to make "deep cuts" to reduce capital expenditures.

Looks like a case of flash and burn to us. µ

L’Inq
YNET (Hebrew)
Haaretz (English)