SanDisk stated that NAND component prices have plummeted 50% in the past two months due to excess supply and along with increasingly cut-throat competition, the company has been forced to take drastic measures to keep costs in check. In order to stay competitive in the marketplace, SanDisk looks to cut executive salaries, eliminate 250 jobs (10% of its workforce), freeze both salaries for current employees and the hiring of new employees as well as lower the prices on its products by 30-40%. By taking the above steps, SanDisk is expected to save between $20-$25 million USD, save another $5-$10 million USD from salary-related measures but also incur restructuring charges of between $15-$20 million USD.
"We believe that lower price points in the NAND industry will accelerate demand, particularly in the handset market, and will stimulate the emergence of new markets, fueling continued growth. Given the strength of our market position and our balance sheet, we believe that our actions will allow us to weather the current challenges and emerge an even stronger market leader when the next wave of growth in flash products emerges," said SanDisk CEO and chairman Eli Harari.