SAN JOSE, CA–( EMWNews – March 28, 2008) – RAE Systems Inc. (AMEX: RAE), a leader in

delivering innovative sensor solutions to serve industrial, energy,

environmental and government safety markets worldwide, announced a ten

percent reduction of its Americas’ workforce. After recording

approximately $100,000 in severance costs in the first quarter of 2008, the

company expects to save approximately $1.3 million annually. Also, the

company has implemented specific cost reductions that will be realized

beginning in the second quarter of 2008, including the elimination of

non-essential marketing programs, streamlining its service processes,

decreasing certain product costs to sustain its targeted gross margins, and

consolidating engineering and manufacturing in China for better facility

utilization.

“Driving profitable revenue growth is our top priority in 2008,” said

Robert I. Chen, president and chief executive officer. “As we discussed in

early March, we have begun implementing specific programs to improve gross

margins, increase productivity and reduce operating expenses without

impacting product quality. RAE Systems values its employees and the

contributions they make to the company; this decision was reached after

careful consideration of current business conditions balanced against our

objective to return to sustainable profitable growth in 2008.”

About RAE Systems

RAE Systems is a leading global provider of rapidly deployable sensor

networks that enable customers to identify safety and security threats in

real time. Products include multi-sensor chemical detection products, wireless gas detection systems and

radiation monitors for energy production and

refining, industrial and environmental safety, and public and government

first responder security. RAE Systems’ products are used in over 85

countries by many of the world’s leading corporations and by many U.S.

government agencies. For more information about RAE Systems, please visit

http://www.raesystems.com/.

Safe Harbor Statement

This press release may contain “forward-looking” statements, as that term

is used in Section 21E of the Securities Exchange Act of 1934.

Forward-looking statements include, without limitation: expressions of

“belief,” “anticipation,” or “expectations” of management; statements as to

industry trends or future results of operations of RAE Systems and its

subsidiaries; and other statements that are not historical fact. These

types of statements address matters that are subject to risks and

uncertainties, which could cause actual results to differ materially.

Factors that could cause or contribute to such differences include, but are

not limited to, the general economic and industry factors and receptiveness

of the market to RAE Systems and its products. In addition, our

forward-looking statements should be considered in the context of other

risk factors discussed in our filings with the Securities and Exchange

Commission, including but not limited to our annual report on Form 10-K and

Form 10-Q filings, available online at http://www.sec.gov. All

forward-looking statements are based on information available to the

company on the date hereof, and the company assumes no obligation to update

such statements.