Spansion Announces Reduction in Force

Spansion announced that it is reducing its global work force by approximately 3,000 employees, or 35 percent. The majority of the positions affected are at Spansion’s global manufacturing sites, as the company resizes the organization due to current market conditions. This action is taken in an effort to further reduce costs as Spansion continues its restructuring efforts and explores various strategic alternatives.

“The global recession is forcing us to make this very difficult decision in order to bring our costs in line with the current expectations for significantly reduced revenues,” said John Kispert, Spansion president and CEO. “This action was not undertaken lightly given its impact on our employees and their families. However, we have a responsibility to preserve the value of the enterprise as we pursue our goal of positioning Spansion for a recovery through a restructuring and/or sale.”

The company expects that when complete, this reduction in force will result in approximately $25 million in cash charges, during the first half of 2009. The company believes this reduction in force will provide it with annual cash cost savings of approximately $225 million.