CREATIVE Technology is cutting about 300 jobs worldwide with most to go from Europe and the United States, it announced last night.
Creative was unavailable to comment on whether any employees will be axed in Singapore, where it has its corporate headquarters and a large part of its research and development (R&D) operations.
The digital entertainment firm's statement said the severance payments and related costs from the job cuts would cost about US$10 million (S$15.4 million) in restructuring charges for the third quarter ending March 31.
The sum also includes 'facilities costs from consolidation of certain international offices'.
Creative made headlines recently with an announcement that it had reduced its headcount by 47 per cent, or 2,700 employees, in the 12 months ended June 30 last year. That left it with about 3,100 full-time employees.
It also axed about 800 staff in the 2007 financial year.
The firm had around 79 per cent of its staff in Asia, 9 per cent in the Americas and 12 per cent in Europe, as of June last year.
When the staff cuts of 47 per cent were announced, a Creative spokesman said there had been no significant change in the overall employment figure in Singapore with the firm still looking to hire more R&D engineers.
Creative has been going through a rough ride. In its second quarter ended Dec 31 last year, it made a net loss of US$32.4 million compared with a net profit of US$7.6 million in the same quarter in 2007. Revenue for the second quarter last year was US$155.7 million, down from US$262.5 million for the same period the preceding year.
- The Straits Times
Showing posts with label Creative. Show all posts
Showing posts with label Creative. Show all posts
Mar 13, 2009
Jan 2, 2009
Creative cuts 2,700 jobs, Singapore staff unaffected
CREATIVE Technology, which makes Zen MP3 players as well as accessories for Apple’s iPod, eliminated 2,700 jobs, or almost half its global workforce, in the last fiscal year after demand for its own music players tumbled.
The company had 3,100 full-time workers at the end of last June, down 47 per cent from a year earlier, Creative said in its annual report filed with the Singapore Exchange.
The more-than-1,000 staff in its headquarters here were largely unscathed by the cuts, which were attributed mainly to the sale of one of Creative’s units in Malaysia last year. “The bulk of the reduction in worldwide workforce was due to the sale of Cubic Electronics, the manufacturing subsidiary of Creative in Malaysia in July 2007.
In Singapore, there is no significant change in our overall employment figure. We are still looking to hire more R&D engineers,” a Creative spokesperson told Today.
Still the extent of the job cuts underlined the challenges Creative has been facing in the last three years, when it was hit by cut-throat competition, resulting in falling sales, razor-thin margins and slipping bottom lines. In the last fiscal year ended June 30, Creative posted a net loss of US$19.7 million ($28.5 million) on sales of US$736.8 million, the lowest revenue in five years.
Creative joins Chartered Semiconductor Manufacturing and Philips Electronics in cutting jobs as demand for electronics falters amid the worldwide recession. The Government said yesterday that the economy may shrink by as much as 2 per cent this year, twice as much as it had projected on Nov 21, as slumping demand from the United States and Europe undermines exports.
Credit Suisse analyst Lim Keng Hock said in a research report last month that Creative’s balance sheet could be weakened during the downturn. He estimated Creative would suffer an annual free cash flow deficit of between US$30 million and US$50 million and erode its US$250 million in cash holdings.
“Until it can show a turnaround in its operations, we are happy to sideline the stock even though valuations are very compelling,” said Mr Lim.
Others see opportunities in Creative’s troubles. DBS Vickers thinks the Singapore icon will make an attractive takeover target. “A potential buyer can extract cash by firstly shutting down its loss-making retail business, then paying off debts with the company’s cash and, last but not least, monetising Creative’s rich library of intellectual properties,” it said in a research note last month.
Creative shares ended the first trading day of the new year down 1.2 per cent at $4.25. The stock dropped 32 per cent last year.
The company had 3,100 full-time workers at the end of last June, down 47 per cent from a year earlier, Creative said in its annual report filed with the Singapore Exchange.
The more-than-1,000 staff in its headquarters here were largely unscathed by the cuts, which were attributed mainly to the sale of one of Creative’s units in Malaysia last year. “The bulk of the reduction in worldwide workforce was due to the sale of Cubic Electronics, the manufacturing subsidiary of Creative in Malaysia in July 2007.
In Singapore, there is no significant change in our overall employment figure. We are still looking to hire more R&D engineers,” a Creative spokesperson told Today.
Still the extent of the job cuts underlined the challenges Creative has been facing in the last three years, when it was hit by cut-throat competition, resulting in falling sales, razor-thin margins and slipping bottom lines. In the last fiscal year ended June 30, Creative posted a net loss of US$19.7 million ($28.5 million) on sales of US$736.8 million, the lowest revenue in five years.
Creative joins Chartered Semiconductor Manufacturing and Philips Electronics in cutting jobs as demand for electronics falters amid the worldwide recession. The Government said yesterday that the economy may shrink by as much as 2 per cent this year, twice as much as it had projected on Nov 21, as slumping demand from the United States and Europe undermines exports.
Credit Suisse analyst Lim Keng Hock said in a research report last month that Creative’s balance sheet could be weakened during the downturn. He estimated Creative would suffer an annual free cash flow deficit of between US$30 million and US$50 million and erode its US$250 million in cash holdings.
“Until it can show a turnaround in its operations, we are happy to sideline the stock even though valuations are very compelling,” said Mr Lim.
Others see opportunities in Creative’s troubles. DBS Vickers thinks the Singapore icon will make an attractive takeover target. “A potential buyer can extract cash by firstly shutting down its loss-making retail business, then paying off debts with the company’s cash and, last but not least, monetising Creative’s rich library of intellectual properties,” it said in a research note last month.
Creative shares ended the first trading day of the new year down 1.2 per cent at $4.25. The stock dropped 32 per cent last year.
Subscribe to:
Posts (Atom)