Creative CEO gives $500K to axed staff

Creative founder Sim Wong Hoo has set up a Hardship Assistance Scheme for his laid off staff

In this story: Hardship assistance scheme Hit by downturn RELATED STORIES, SITES

By Kristie Lu Stout
CNN.com Writer

SINGAPORE (CNN) -- Earlier this week, Creative Technology chief Sim Wong Hoo passed out over 500 pink slips. Now, he's handing out half a million dollars.

The founder of the Singapore-based computer peripheral maker is giving $500,000 of his personal funds to his laid off staff.

Creative announced on Tuesday that it would cut 10 percent of its worldwide workforce in order to meet profit margins, a testimony of how even Singapore's high-tech success story is not immune to the global technology slump.

Hardship assistance scheme

Sim has set up a hardship assistance scheme for the 100 Singapore-based Creative staff who will be laid off.

Company spokesperson Wynne Leong told CNN.com Sim would give $2000 each to all Singapore-based retrenched staff.

Singapore's Straits Times reports that for genuine hardship cases, Sim would give another $2,000 in the form of an interest-free loan.

"If they pay me back, the money goes to charity. If not, it's okay," Sim told the newspaper yesterday.

Philanthropy is not a new gesture for the chief executive. Sim Wong Hoo has given a total of $2.5 million to schools and various charity funds.

Hit by downturn

Last year, the maker of the Nomad Jukebox MP3 player generated revenues of $1.3 billion. But even with those numbers, Creative Technology is not impervious to the economic dip.

"Creative is not an exception," says Merrill Lynch Singapore vice president Stephen Chan.

"Other companies are doing similar measures and they are not the only ones suffering from the current downturn."

The company's cost cutting initiatives also includes the closure of a manufacturing center in the United States.

To meet its third quarter sales target of $260 million to $270 million, analysts say Creative has no choice but to cut costs drastically.

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Creative Technology

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