Singapore electronics company Creative Technology has reportedly begun restructuring its workforce, leading to the retrenchment of about 40 employees or 14% of its team.

The move is yet another indication of the structural shifts in the global tech industry, where companies are streamlining operations amid market turbulence.

A company spokesperson confirmed the layoffs to The Straits Times, stating that Creative was restructuring parts of its business to adapt to market conditions.

While declining to specify the number of affected staff members or whether all were based in Singapore, the spokesperson said the decision was made with great consideration.

“This decision was not taken lightly as our employees have been the heart of our company,” they said, adding that the firm would support affected staff and ensure the retrenchment process adhered to Singapore’s Ministry of Manpower guidelines.

The restructuring touched multiple departments, including sales and marketing. The company said it hopes the measures will enable it to build a more sustainable future and regain a stable footing.

Also Read: Surviving layoffs: How to bounce back

Mounting losses despite revenue growth

Creative’s restructuring comes on the heels of financial challenges. For the first six months of its fiscal year ending 31 December 2024, the company’s net loss widened to US$6.1 million (S$8.1 million), up from $4.1 million in the same period the previous year. This was despite an 18% increase in net sales, reaching $37.4 million (S$49.8 million).

In November 2024, Creative acknowledged recording pre-tax losses for three consecutive years. It also flagged concerns over global economic uncertainties, particularly the impact of import tariffs introduced by the Trump administration, which could drive up inflation and dampen consumer demand.

Leadership transition amid headwinds

The layoffs came just weeks after CEO Song Siow Hui retired in February 2025, following more than 30 years with the company. Executive chairman Tan Jok Tin has since stepped in as interim CEO while the board conducts a global search for a “dynamic and visionary” leader to steer the company forward.

Song’s tenure followed the unexpected passing of Sim Wong Hoo in January 2023. As Creative’s founder and longtime CEO, Sim was a pioneer who put Singapore on the global tech map. Under his leadership, Creative became a household name in the 1990s with its Sound Blaster audio cards, which revolutionised multimedia experiences on personal computers.

Also Read: The best employees are getting fired

From innovation leader to challenger

Founded in 1981, Creative was once a dominant force in the digital entertainment industry. The Sound Blaster sound card, launched in 1989, set the gold standard for PC audio, outselling competitors by a ratio of 7:3 at its peak. Over 400 million units have been sold to date.

The company was also ahead of the curve in the portable music player market, introducing the Nomad MP3 player in 1999, two years before Apple debuted the iPod. Creative’s foray into digital music paved the way for handheld devices capable of storing thousands of songs – long before streaming became the norm.

Despite these pioneering efforts, Creative struggled to maintain its market dominance. While its Nomad Jukebox Zen offered additional media storage capabilities, Apple’s sleek marketing and ecosystem helped the iPod surge ahead.

Creative sued Apple for patent infringements in 2006, walking away with a US$100 million settlement.

Tech industry layoffs: a global wave of cuts

Creative’s retrenchment is only the latest wave of layoffs that have swept through the tech sector since 2022.

According to Layoffs.fyi, more than 150,000 employees were let go by 548 tech firms in 2024 alone. In the first two months of 2025, over 13,300 workers lost their jobs, including employees at Meta, TikTok, Dyson, Microsoft, and Google – some of whom were based in Singapore.

Experts cite overhiring during the pandemic, coupled with geopolitical instability, trade wars, and economic uncertainty, as key factors driving these job cuts. While many firms are adjusting to new economic realities, Creative’s challenges are somewhat unique.

Once an industry trailblazer, its shrinking market presence over the years has added an extra layer of difficulty in navigating the current downturn.

With a leadership transition under way and a restructuring plan in motion, Creative is at a crossroads. The firm is expected to reinvent itself in an increasingly competitive market while capitalising on its strengths in audio and digital entertainment.

The company is now searching for its next CEO. One question, however, remains: can Creative recapture the spirit of innovation that once made it a global leader, or will it continue to struggle in the shadow of industry giants?