Nvidia institutes swift layoffs in the wake of lawsuits
Graphics company Nvidia is making a swift cut to its workforce, laying off 6.5% of its international staff starting immediately, and ending with the closeout of 2009's third fiscal quarter.
It's been a rough summer for Nvidia. While engaged in a price war with rival AMD, the news came out that several previous generation GPUs were failing at abnormally high rates in the field due to a weak die and material set. The cost of replacement and repairs set the company back at least $200 million and its stock value took a sharp 22% drop.
Later reports surfaced that between 15 and 75 million laptops with Nvidia GPUs were actually affected by the inferior materials, believed by many to be the solder used in crucial connections.
This issue landed Nvidia in court this month on charges of securities violations. The graphics company was accused of having knowledge of the flaw as early as November 2007 and concealing it from the public. This week, the suit was given class action status in the Northern District of California. Nvidia stands accused of violating the Securities Exchange Act of 1934 for concealing information that could be financially damaging, and for filing materially false and misleading financial statements from November 2007 to July 2008.
"We are taking fast action to enhance our competitive position and restore our financial performance. All of us at NVIDIA are determined to emerge from these challenges an even stronger company," President and CEO of Nvidia Jen-Hsun Huang said in a statement.
This layoff will affect approximately 360 employees.