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Thursday, April 17, 2008

AMD starts layoffs in Austin, U.S.

By kirk ladendorf | Thursday, April 17, 2008, 01:39 PM

Advanced Micro Devices Inc. cut 420 jobs today, including 215 in Austin, as the chip-maker took the first steps toward its major worldwide staff reduction that will continue for the next six months.

The job cuts will affect workers at all levels and in all parts of the country, AMD has said. The company said last week it would cut 10 percent of its 16,800 jobs worldwide by the end of September.

Today’s cut primarily affected company workers in North America, but eventually the company expects almost all its global operations will be affected.

The chip-maker announced the staff reductions last week as a way to reduce its costs in line with expectations of reduced revenue this year.

Wall Street investment analysts have urged the company to get its costs under tighter control as the company struggled with the $5.4 billion acquisition of ATI Technologies Inc. in late 2006 and with tougher competition from its larger and richer arch-rival Intel Corp.

Austin, which had 2,700 workers before the job cuts, is AMD’s largest non-manufacturing campus. The company employs about 3,500 workers in Dresden, Germany, where its major factory operations are located.

Austin is one of the company’s major sites for engineering, product design, marketing and administration. Most of the company’s senior management team lives and works here, even though AMD’s official headquarters is in Sunnyvale, Calif.

Top executives were expected to discuss the downsizing on a conference phone call with financial analysts this afternoon, after it reports first quarter financial results. AMD said last week that it will report quarterly revenue of $1.5 billion,below its original estimate.

AMD’s business was hurt last year when the company stumbled in introducing its two most important computer processor chips.

Those delayed chips are now shipping and analysts expect AMD’s sales will pick up over the next several quarters.

But competition from Intel, which is larger and richer and has introduced a series of strong products, remains fierce.

“Intel is coming at them from all sides with overwhelming firepower,” analyst Roger Kay with Endpoint Technologies Associates Inc. said last week.

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