Published January 3, 2009

2,700 Creative jobs axed in last fiscal year

Company says bulk of cuts is due to the sale of a Malaysian manufacturing subsidiary in 2007

By ONG BOON KIAT

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CREATIVE Technology culled its workforce by almost half in FY2008, an annual filing by the company on the eve of 2009 has revealed.

STANDING FIRM In a statement, Creative said that 'its future success will largely depend upon its ability to continue to attract, retain, train and motivate highly skilled and dedicated employees'

The MP3 player maker slashed its headcount by 47 per cent - or 2,700 employees - in the 12 months ended June 30, 2008.

A Creative spokesman said yesterday that the cut was largely due to the sale of Cubic Electronics, Creative's manufacturing subsidiary in Malaysia, to a group of investors in July 2007.

'In Singapore, there is no significant change in our overall employment figure,' the spokesman said. In fact, the company is 'still looking to hire R&D engineers'.

At end-June 2008, Creative had some 3,100 full-time employees, compared with 5,800 a year earlier, the company said in a Form 20-F it filed with the Singapore Exchange on Wednesday.

'In Singapore, there is no significant change in our overall employment figure.' - Creative spokesman

Form 20-F is a US Securities and Exchange Commission form used by foreign companies to file annual reports.

In the statement, Creative said that 'its future success will largely depend upon its ability to continue to attract, retain, train and motivate highly skilled and dedicated employees'.

Its employee relations 'are good' and it 'has not experienced any work stoppages in the past', it said.

In June 2008, 79 per cent of Creative's staff were located in Asia, 9 per cent in the Americas and 12 per cent in Europe.

In terms of job functions, 33 per cent of staff were in manufacturing, 18 per cent in selling, marketing and customer support, 36 per cent in R&D and 13 per cent in administrative and other roles. None of Creative's employees is represented by a labour union.

The Singapore-grown tech giant has been fighting slipping profits and waning sales in recent times.

It incurred a net loss of US$31.7 million for the fourth quarter of FY2008 - its biggest loss in nine quarters. And it closed FY2008 with a full-year net loss of US$19.7 million on sales of US$736.8 million.

Following that, it posted a Q1 2009 net loss of US$32.2 million. And it issued a downbeat sales forecast for its customarily bullish holiday year-end season - a Q2 revenue range of between US$140 million and US$160 million.

Creative shares closed five cents lower at $4.25 yesterday.