AMD will cut 10 per cent of global workforce

Decimation by Q3 or bust

By Austin Modine • Get more from this author

Posted in Financial News, 7th April 2008 21:30 GMT

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AMD plans to cut 10 per cent of its workforce over the next two quarters, after suffering lower-than-expected sales across all business units, the company said today.

The chipmaker revealed the flesh shedding, which will affect more than 1,600 people, in an update to its first quarter outlook, which AMD will detail on April 17.

AMD expects revenue to come in at $1.5bn, a 22 per cent increase year-over-year, and 15 per cent decrease compared with the previous quarter.

Late last month, a rumors began circulating that AMD already cut 5 per cent of its workforce in light of the gloomy quarter. AMD had denied the claim, and at the time refused to comment on any impeding layoffs.

AMD spokesperson Drew Prairie confirmed today that the layoffs have not yet begun, although they'll start beginning mid-April and ending in the third quarter 2008. He said the reduction will span all groups and levels across the company's global operations.

Prairie said there were cost structures that needed to be reduced due to low revenue expectations. He said AMD's lineup for the upcoming year, however, has great potential for revenue gains. Who would have guessed?

AMD shot itself in the foot by failing to push out a four-core version of its Opteron chip on schedule. This delay allowed Intel to regain market share with server processor sales.

The upcoming year is almost certainly do-or-die for AMD CEO Hector Ruiz, who stated he expects the company to return to an operating profit in the third quarter of this year. It would appear his master plan has been revealed. ®

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