Less than a week after abruptly laying off 3,000 employees, flash memory giant Spansion has filed for Chapter 11 bankruptcy.

The Chapter 11 protection was filed in an effort to "restructure its burdensome debt obligations and intensify its focus on market segments with greater profit potential." The burdensome debt they are referring to totals $625 million.

Not all is grim for the company however. Ex-CEO Bertrand Cambou was replaced in early February and wias given a $751,000 severance package. After being "literally in tears," he has stated he will return the money to Spansion, minus the taxes taken. Cambou hopes that Spansion will take some of the $403,000 will return and give it to those that the company laid off.

A Spansion spokesperson gave The Register the following statement: "We appreciate Dr. Cambou's symbolic gesture and his concern for the welfare of Spansion and its employees," and said that the company was duscussing the matter with Cambou.

A joint venture of AMD and Fujitsu, the Sunnyvale, California-based Spansion is the world's third-largest flash maker. But its so-called NOR flash chips - intended for manufactures of cell phones and cars - are significantly less popular than the NAND flash chips manufactured by Samsung and Toshiba.

In the fall, Spansion heavily slashed employee pay, and on January 15, the company announced it was working to restructure its balance sheet - and perhaps sell itself - against the backdrop of a sinking worldwide economy. Then its Japan unit filed for bankruptcy. And on February 23, the company suddenly laid off 3,000 workers in the US and abroad - 35 per cent of its staff.