It will incur restructuring charges of about US$10 million in Q3; majority of cuts from Europe and US
By ONG BOON KIAT
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CREATIVE Technology has carried out a retrenchment exercise that will slash about 300 jobs worldwide, with majority of the cuts from Europe and the US.
In a short two-paragraph statement to the Singapore Exchange yesterday, Creative said that it will incur restructuring charges of about US$10 million for its fiscal third quarter ending March 31, 2009.
The restructuring charges 'are related to severance payments and costs associated with headcount reductions, primarily in the company's global field organisations and facilities costs from consolidation of certain international offices'.
The MP3 player and PC soundcard maker did not say how much money its restructuring will help save.
Cost-cutting measures have been earlier hinted at by the company. In its Q2 earnings announcement in January, president and chief operating officer Craig McHugh said that Creative was 'evaluating' the structure of its field organisations to reduce operating expenses.
This is the second headcount reduction at Creative reported in recent months.
Three months ago, a 47 per cent headcount reduction - around 2,700 jobs - which occurred in the 12-month period to June 30 last year, came to light when the company filed its annual report with the Singapore Exchange.
Creative said then that the bulk of cuts was due to the sale of a Malaysian manufacturing subsidiary in July 2007.
As at end-June 2008, Creative has a reported 3,100 full-time employees.
Creative has had a troubled start to its current financial year. It posted a net loss of US$32.2 million for its first quarter, a sharp fall from a gain of US$1.31 million in the year-ago period.
Its second quarter net loss of US$32.4 million was the company's biggest quarterly loss in 11 quarters. Sales in those two quarters were also lower compared to the previous year.
The company recently closed down its 208-square metre downtown lifestyle concept store at the Marina Square mall, leaving it with two retail outlets in Singapore - one at Plaza Singapura, and another at Creative's headquarters building at the International Business Park in Jurong East.
One bright spot for Creative is its new computer chip technology, dubbed Zii, which has already been embraced by a number of partners around the world since its launch in January this year.
Creative shares closed five cents higher yesterday at $3.45.
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