Technology company announces furlough

AUSTIN (KXAN) - Austin flash memory maker Spansion has announced a furlough, according to a memo sent to Austin City Council members and the mayor. The three week furlough will begin Dec. 13, 2008 according to Rodney Gonzales, Acting Director of the city's Economic Growth and Redevelopment Services Office.

"During the furlough," said Gonzales, "all operations will cease and employees will not report to work." Spansion claims itself as a leader in the flash memory market, according to its Web site.

"I can't imagine it coming at a worse time," said Austin City Council member Mike Martinez. "It's going to be difficult for these folks, but hopefully a three week cost savings plan will create some stability for them so those folks can come back to work."

The company issued the following statement Tuesday. "In anticipation of a weak holiday season and deteriorating macroeconomics, Spansion's Austin facility will be closed for two weeks during Q4 '08. This decision is consisten with other chip manufacturers and reflects the overall impact that the worldwide financial crisis has had on the demand for semiconductors in the Flash memory industry."

Council member Martinez acknowledges the hit to the semiconductor industry is hitting Austin hard.

"It worked out well when the semiconductor industry was peaking, but now that in some folks' minds its gone bust, now it's working against us in a very negative way," Martinez said.

In November, Freescale Semiconductor let go of 138 employees on the heels of layoffs at other Austin tech companies like AMD, Sun Microsystems, and Dell.