Earlier this week, as 3,000 employees of Spansion, the Sunnyvale semiconductor company, were being laid off, many of their bosses were getting pay increases.

That juxtaposition — against the backdrop of the deteriorating economy and nationwide anger about greedy executives — has triggered outrage among the workers who have been let go.

Scores of the laid-off workers jammed a West San Jose pizza parlor Thursday to join two class-action lawsuits against the firm and to vent their anger.

“It’s just callous,” said 38-year-old Eric Rebaker of Boulder Creek, who lost his job as a Spansion plant maintenance specialist. “To hurt all these families — it makes me absolutely angry.”

The employee layoffs, constituting about 35 percent of Spansion’s global workforce, were announced as a cost-cutting measure in a company news release Monday. In a separate filing with the U.S. Securities and Exchange Commission the same day, Spansion disclosed that its board had rescinded a six-month 10 percent pay cut imposed in October on some managers.

The decision to restore the pay was “to provide an incentive for executive officers and certain other key employees to remain employed by the company,” the filing said.

Layoffs ‘regrettable’

In a prepared statement Thursday, Spansion called the layoffs — which affected 615 California employees — “regrettable.” But it added that “the board of directors made a strategic decision to restore the full salaries of our key executives to ensure their continued commitment to the company’s future.”

In an interview, Russ Barck, Spansion’s chief of staff, declined to say how many people had their pay restored, except to note that it was “a very small subset of the company.”

Although “none of us feel good about the reduction in force,” Barck said, “it was one of those things we felt from a business perspective we had to do.” He added that Spansion is confident the layoffs were done lawfully.

However, two class-action suits filed in U.S. District Court in San Jose on behalf of fired Spansion employees dispute that. Both claim that Spansion failed to adhere to federal and state law, known as the WARN Act, requiring large employers to give a two-month notice before laying off more than 50 workers.

“What we’re seeking on behalf of the folks who were recently let go by Spansion are damages in the form of back pay and other benefits that they likely were entitled to but didn’t receive,” said Eric Gibbs, a San Francisco lawyer handling the cases.

Company spokeswoman Holly Burkhart said Spansion filed a WARN Act notice Monday, but that it has an “exemption” to the 60-day notice requirement. The company would not elaborate.

Neither suit addresses the issue of the executives’ pay being restored. But the attorneys handling the suits said that issue may become relevant later in court.

“Right now I just think that’s a very unsavory aspect of it,” said San Francisco attorney Ken Sugarman, who filed one of the suits. He questioned Spansion’s claim that restoring the pay would help keep key employees from leaving.

With so few companies hiring in this economy, Sugarman asked, “Where are they going to go?”

Maker of flash chips

Spansion was formed by Sunnyvale computer chip maker Advanced Micro Devices and Fujitsu, the Japanese technology company, in 1993 under the name Fujitsu AMD Semiconductor Limited. In 2003, AMD and Fujitsu renamed it Spansion, and the firm became an independent public company in December 2005.

Its bread and butter is so-called flash memory chips used to store data in cell phones, cars, printers and other electronic devices. But it has struggled, especially during the worldwide recession, which has reduced consumer demand for gadgets containing such chips.

The company has consistently lost money since it went public and was $133 million in the red for the third quarter of 2008, the most recent period for which it has disclosed financial data. The company’s stock closed Thursday at 5 cents; its 52-week high is $3.70.

In addition to the layoffs, Spansion recently announced it would delay paying some of its debt and consider selling itself or merging with another company.

Making sure its top executives stick around during tough times could be an important selling point if Spansion wants to attract a buyer, said Jim Balassone, an executive in residence at Santa Clara University’s Markkula Center for Applied Ethics.

But Spansion’s decision to pay the executives more while laying off others doesn’t look good, he said, adding, “It appears there is no shared sacrifice.”

A lot of those who lost their jobs feel the same way.

“It’s greed,” said Jose Alejandrino, 50, of San Ramon, who said he worked in a Spansion testing area. He worries how he will pay his mortgage and three kids’ college bills.

“I’ve had a really hard time sleeping the last few nights,” added 54-year-old Paula Rao of Santa Clara. “I guess the bottom line is they have money to reward the execs that trashed the company, but not a crumb for the employees that truly deserved better.”

Contact Steve Johnson at sjohnson@mercurynews.com or 408-920-5043.