AMD to spend $50m cutting costs
If it wasn't for bad luck...
There's more bad news for AMD stockholders - $50m (£33.7m) worth of bad news, to be exact.
In December of 2008, the company told the US Securities and Exchange Commission (SEC) that it would incur restructuring costs in the first half of 2009, but that it couldn't then estimate what those costs would be.
On Thursday, in an Form 8-K/A filing, AMD put a number on those costs: $50m.
Of that $50m, approximately $23m (£15.5m) is slated for employee severance payments and related benefits, $13m (£8.8m) for contract or program termination costs, $7m (£4.7m) for "asset impairments," and another $7m site consolidations and closures.
AMD also stated that the restructuring will be complete in the fourth quarter of the company's fiscal 2009, meaning by the end of this year.
While $50 million may not be a significant sum for a company as large as AMD, the announcement of this additional expense is yet another slice of humble pie for a company that's eaten more than its share of recently.
This January, for example, AMD reported that it had lost more than $3bn (£2bn) during 2008 - a sum that makes $50m look like chump change.
And hidden underneath the clean corporatese of "restructuring" is the plain-English pain of lost jobs. In January, the company announced that 1,100 employees would be getting pink slips - and that was after the 500 job cuts they had announced in November had grown to 600 by December, the month during which AMD announced that its Q4 sales would be a full 25 per cent lower than those of Q3.
Even when the news has been good for AMD, it has soon been overshadowed by another downer. For example, when iSuppli reported that AMD had inched its market share up slightly in Q1 of last year, AMD promptly began Q2 by announcing that it would cut 10 per cent of its global workforce.
And it seems as if the world enjoys kicking AMD while it's down. Arch-rival Intel, for example, recently hit the company with a patent-breach claim, and Moody's Investor Service placed it on its Bottom Rung list of America's most troubled companies, debt-wise.
And so while $50m may not be a big deal to a multi-billion-dollar company such as AMD, it's bit like stubbing your toe after a chemotherapy session. It doesn't matter that much in the long run - but it still hurts. ®
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