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The entry titled "UPDATE: AMD announces 10 percent layoff plan," and any of the comments about it.
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Home > Plugged In > Archives > 2008 > April > 07 > Entry
UPDATE: AMD announces 10 percent layoff plan
Advanced Micro Devices Inc. said Monday it will cut its global work force by 10 percent over the next six months as the company takes steps reduce costs and improve profits.
A company spokesman declined to elaborate on what the job cuts would mean for Austin, where the company has its main centers for product engineering, marketing and administration.
The job cuts were announced Monday afternoon when AMD said its first quarter revenue will fall well below expectations. AMD said it expects to report $1.5 billion in first quarter sales, a drop of 22 percent from the first quarter a year ago and 15 percent from the fourth quarter. The company had previously said it expected a seasonal decline of 5-10 percent in first quarter sales.
The chipmaker said the disappointing revenue figure was due to lower-than-expected sales across all business segments.
AMD employs 16,800 people worldwide, including about 2,700 in Austin. The company ranks second to Intel in making advanced processor chips for personal computers and servers. It also is a leading supplier of graphics chips used in computers and consumer electronics devices.
The job cuts will start in mid-April and continue through the third quarter.
“They will span all groups and levels in the company,” said spokesman Drew Prairie. “We are taking the action to create a cost structure that helps us achieve business objectives and return the company to profitability.”
AMD has been under heavy pressure from investors for the past year as it fumbled key product introductions and struggled to keep up with arch-rival Intel Corp., which delivered a stream of well-regarded chips.
Wall Street analysts have criticized the chipmaker for being slow to cut costs after it made an expensive acquisition of graphics-chip supplier ATI Technologies Inc. The company’s top executives have resisted previous calls for deep spending reductions, saying that the best plan to achieve profitability was to expand sales to $2 billion per quarter or higher.
AMD paid $5.3 billion for ATI, a deal that left the combined company saddled with a heavy debt load.
AMD lost $3.38 billion on sales of $6.01 billion for 2007 and it ended the year taking a $1.6 billion accounting charge tied to the reduction in value of its ATI acquisition.
Comments
By Mathman
April 7, 2008 9:43 PM | Link to this
Let’s see, a senior management team that took the company from a $20 B enterprise to $3.5 in less than two years.
Where do you start the layoffs?