Flash memory maker, SanDisk is cutting 10 per cent of its work force to remain profitable while being forced to make steep price cuts.
Last week, SanDisk said it would lay off about 250 employees beginning in early March but also cut salaries for top executives and freeze salaries for all other employees.
A 50 per cent reduction in NAND flash memory component prices in the last two months forced SanDisk to cut prices at the retail level and to original equipment manufacturers by between 30 per cent and 40 per cent, chairman and CEO of SanDisk, Eli Harari, said in a prepared statement.
"Although we believe there will be strong pickup in demand for our products in the second half of the year, we do not have visibility as to when the current aggressive pricing cycle will run its full course, and gross margins are likely to remain under significant pressure for several quarters," Harari said, who'll be taking a 20 per cent pay cut under the austerity plan.
The president of SanDisk and several executive vice-presidents will be hit with 15 per cent pay cuts and other vice-presidents will get 10 per cent cuts. There will also be a freeze on new hiring in many areas of the company.