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Creative Technology cuts workforce, joining wave of tech layoffs

Creative Technology cuts workforce, joining wave of tech layoffs

  • 17.03.2025 04:21
  • businesstimes.com.sg
  • Keywords: Layoffs

Creative Technology has laid off around 40 employees (14% of its workforce) as part of a global tech layoff trend that began in 2022. The company is restructuring to adapt to market conditions and improve long-term sustainability.

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Estimated market influence

Creative Technology

Negativesentiment_dissatisfied
Analyst rating: N/A

The company is restructuring and laying off employees to adapt to market conditions.

Meta

Meta

Negativesentiment_dissatisfied
Analyst rating: Strong buy

Meta has been part of the global tech layoffs wave, with some employees in Singapore affected.

TikTok

Negativesentiment_dissatisfied
Analyst rating: N/A

TikTok is one of the companies laying off staff globally, including those in Singapore.

Dyson

Negativesentiment_dissatisfied
Analyst rating: N/A

Dyson has also been part of the global tech layoffs wave, affecting some employees in Singapore.

Microsoft

Microsoft

Negativesentiment_dissatisfied
Analyst rating: Strong buy

Microsoft is laying off staff globally, including those in Singapore.

Google

Negativesentiment_dissatisfied
Analyst rating: N/A

Google has been part of the global tech layoffs wave, with some employees in Singapore affected.

Context

Analysis of Creative Technology's Workforce Reduction and Market Implications

Workforce Reduction

  • Staff Cut: Creative Technology retrenched approximately 40 employees, representing about 14% of its global workforce.
  • Affected Departments: The restructuring impacted several departments, including sales and marketing.

Financial Performance

  • Net Loss: For the first six months of its fiscal year (ended Dec 31, 2024), Creative reported a net loss of US$6.1 million, up from US$4.1 million in the previous year.
  • Revenue Growth: Despite the net loss, net sales increased by 18% to US$37.4 million due to higher sales of audio products like Super X-Fi earbuds and headphones.

Global Tech Layoff Context

  • Global Trend: The layoffs at Creative are part of a broader global tech industry trend that began in 2022.
  • Layoffs Data: According to Layoffs.fyi:
    • Over 150,000 employees were terminated by tech firms globally in 2024.
    • In the first two months of 2025 alone, more than 13,300 people lost their jobs across the industry.

Strategic Restructuring

  • Reason for Restructuring: The company attributed the layoffs to a need to adapt to evolving market conditions and build a sustainable future.
  • Leadership Changes: Creative is currently on a global hunt for a new CEO following the retirement of Song Siow Hui, who had led the company for over three decades.

Historical Context

  • Founding and Growth: Founded in 1981 by Sim Wong Hoo, Creative became a global leader in audio technology during the 1990s with its iconic Sound Blaster card.
  • Market Dominance: The Sound Blaster card outsold competitors by a ratio of seven to three due to its affordability and quality, with over 400 million units sold.

Competitive Landscape

  • Apple Rivalry: Creative was the first Singaporean company to challenge Apple in portable music players (e.g., Nomad MP3 player launched in 1999 vs. Apple's iPod in 2001).
  • Legal Victory: In 2006, Creative successfully sued Apple for patent infringement, securing a US$100 million settlement.

Innovation and IP Strategy

  • Innovation Legacy: The company's focus on innovation is highlighted by its early adoption of portable music players and multimedia technology.
  • Product Diversification: Creative has introduced products like the Nomad Jukebox Zen, which combined music storage with other media formats.

Long-term Outlook

  • Market Challenges: The tech industry faces ongoing challenges from inflationary pressures, trade tensions, and shifting consumer demand.
  • Sustainability Focus: Creative's restructuring aims to ensure long-term success by aligning its operations with current market realities.

This analysis underscores the significant business and market implications of Creative Technology's workforce reduction, reflecting broader trends in the global tech industry and the company's efforts to adapt to changing conditions.