SanDisk Corporation (Nasdaq:SNDK) will fire 250 employees, a tenth of labor force as part of a series of cost-cutting measures. The layoffs will be across the board and in all countries where the company operates, which means Israel too. Since acquiring msystems for $1.55 billion last November, 800 of SanDisk’s 2,500 employees are in Israel.
Most of the lay-offs will be made in early March. They are related to SanDisk’s decision to reduce sales of USB products to third parties in favor of focusing on the company’s own labels.
SanDisk is also cutting executive salaries. Chairman and CEO Eli Harari will cut his pay by 20%. He made $722,000 in 2005, not including bonuses and options. The salaries of vice presidents will be cut by 10-15%. The company has also frozen the salaries of employees, and will suspend the hiring of new employees, except for those hired to develop x4 and D3 technologies.
SanDisk expects to save $30-35 million a year from these measures. The lay-offs will also save the company $10 million a year in spending related to employee stock option grants. The company estimates the cost of the restructuring at $15-20 million.
Published by Globes [online], Israel business news - www.globes.co.il - on February 18, 2007
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