Spansion Needs a Clue


It seems someone didn’t get the memo.

At a time when most enterprises in the U.S. appreciate that, in the face of big layoffs, they can no longer give bonuses to their executives, someone apparently forgot to tell Spansion Inc.


On the same day that Spansion (SPSN) announced the lay-off of 3,000 of its employees, the company also announced that it planned to give back to its executives the company previously cut in the name of good corporate citizenship. So massive job cuts and executive suite pay raises, all on the same day. . . From a publicly traded company.

And it gets even worse. Unlike Wells Fargo, which, after hearing the outcry from shareholders and other public citizens, cancelled its plan to send employees to high-priced hotels in Las Vegas, Spansion responded to its own crisis with relative silence. No executive would talk on camera, only a short printed statement expressing “regret” about the layoffs, and pointing out that some of those getting raises were below the VP level. Just curious: do you suppose that makes any of the 3,000 who lost their jobs feel any better?

Apparently not, because some of them are now filing a lawsuit against the company, claiming that not enough notice was given before the layoff was announced. As for the executives and employees who got the money, I asked Jim Basallone of the Markkula Center for Applied Ethics at Santa Clara University if he thought employee retention could be behind the pay boosts. Basallone, who comes to Santa Clara with decades of tech industry experience, asked me: in this market, where would they go? He has a point.


Basallone calls the message sent by the company “at best, insensitive, to irresponsible.”

At a time when public relations is of crucial importance, Spansion dropped the ball, plain and simple. But maybe its executives are not as worried about image as most other publicly traded companies. As I write this, Spansion stock trades at 5 cents a share.

Editor’s Note: Scott Budman filed this story at Edgelings on Friday evening, at the same time it ran on NBC-KNTV news. Sunday, Spansion shocked the market by announcing it was entering Chapter 11 Restructuring.


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