AMD to axe 1,100 (more) jobs
'Temporary' wage reductions
AMD plans to slash its workforce by 9 per cent beginning next month, while temporarily reducing wages from its CEO down to hourly workers.
"As a result of the continuing global economic downturn, we have determined that we need to take difficult, but prudent, actions designed to reduce costs," AMD said in a statement.
Starting February, the chip maker will cut about 1,100 positions through a combination of layoffs, attrition, and the off-loading of the handheld business it inherited through ATI.
The layoffs will affect about 900 employees. AMD spokesman Michael Silverman told us the job cuts will be across all levels, segments, and regions, but he said this would be done in a way that preserves AMD's capability to execute on their road maps.
The 9 per cent headcount reduction will not affect the 3,000 employees who will join The Foundry Company, AMD's new chip fabbing spin-off that will likely take flight in the first quarter.
The company also laid off 600 people in the fourth quarter of 2008.
In the US and Canada, all overtime-eligible employees will get a temporary 5 per cent pay cut, and non-overtime eligible workers a 10 per cent cut.
AMD executives in North America with a rank of vice president and above will receive a temporary 15 per cent wage reduction.
Executive chairman Hector Ruiz and CEO Dirk Meyer will also temporarily have their base salary lowered by 20 per cent.
The company said operations outside North America will implement "voluntary pay reduction measures consistent with local policies and regulations."
Silverman said the pay cuts are temporary and will be reversed "when business conditions and financial performance return to acceptable levels as determined by management." This will be gauged on a quarterly basis.
AMD is also suspending matching contributions to its employee 401k plan in the US and delay implementation of the RRSP company match program in Canada.
"These actions, while difficult, will allow AMD to better navigate the turbulent economic conditions while protecting our core capability to execute our technology roadmaps and position AMD for long-term success," the company said in a statement.
AMD's finances are feeling the squeeze from reduced demand amidst the economic slowdown. Last month, the company warned that its fourth quarter revenues will be significantly lower than previously expected. The company will report its Q4 results next Thursday, January 22. ®