Flash memory maker Spansion is to shed 3,000 workers, 35 per cent of its workforce, and is looking for a buyer for the business.
The news comes a day after Micron Technology announced that it will lay off staff and shut down manufacturing of 200mm DRAM wafers. The collapse in demand from manufacturers has been blamed for both sets of redundancies.
"The global recession is forcing us to make this very difficult decision in order to bring our costs in line with current expectations for significantly reduced revenues," said Spansion president John Kispert.
"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 announcement has angered many, however, since the firm has decided to rescind an earlier 10 per cent pay cut for senior executives. Spansion is reported as saying that the pay hike was needed for an "employee retention programme".
The company said that the downsizing would cost $25m (£17m) but would bring in savings of $225m (£155m) over the coming year.
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