AMD cuts 9% of their workforce
1/18/2009 2:06:00 PM
It's tough time these days as another major company is cutting back. 9% or 1,100 workers will be looking for new jobs from AMD as they are slashing their workforce. Also, everyone from the executives to the salaried workers are going to be getting a paycut. While it's never nice to see people lose their jobs, it's at least a little refreshing to see that the executives are going to be taking a cut as well albeit it won't hurt them as much as others. AMD has arguably the best graphics card out there right now with their ATI Radeon HD 4870 but their CPU's have been lagging behind Intel. Let's hope the economy turns around soon so that some of these folks get their jobs and income back.
SAN FRANCISCO (AP) - Advanced Micro Devices Inc. plans to cut 1,100 jobs, 9 percent of its global staff, and slash the remaining employees' pay as the chip maker hopes its third round of layoffs in a year can help it get through a brutal market for computer sales.
The Sunnyvale, Calif.-based company said Friday that 900 workers will have their positions cut. The rest of the reductions are coming from attrition and the previously announced sale of a business unit.
The company has 15,000 workers currently, but it is spinning off its manufacturing operations, which have 3,000 employees who are not affected by Friday's announcement. So AMD's cut of 1,100 jobs amounts to 9 percent of the remaining 12,000 workers.
The firings represent AMD's third round of major layoffs in the last year. AMD cut 600 workers just last month, and earlier in 2008 jettisoned 1,600.
Pay for workers who survive the cuts will shrink. AMD's CEO Dirk Meyer and executive chairman Hector Ruiz, the former CEO, will see their salaries slashed by 20 percent. Vice presidents and other top management will have their pay cut 15 percent, other salaried workers will go down 10 percent, and pay for hourly workers will fall 5 percent. AMD said the pay cuts are temporary. AMD was not specific about how pay would be cut in other countries.
AMD shares fell 2 cents, or 0.9 percent, to $2.24 in afternoon trading Friday.
AMD is in the throes of a big restructuring that has seen it change CEOs, sell nearly a fifth of the company to an investment arm of the Persian Gulf state of Abu Dhabi, and agree to break off its factories in a moneysaving move.
AMD is the smaller rival of Intel Corp., the world's biggest semiconductor company, and has struggled with product delays, huge debt from its $5.6 billion acquisition of graphics chip maker ATI Technologies, and the inability to outspend Intel on developing new technologies.
AMD's announcement came a day after Intel reported that fourth-quarter profits dropped 90 percent and sales fell 23 percent, a sign of the severity of the slowdown facing both companies, which provide nearly all the microprocessors for the world's PCs.
AMD, which reports its fourth-quarter results on Thursday, has already warned that its sales will come in 33 percent lower than a year ago. Over the past eight quarters, AMD has lost $5.6 billion, and analysts aren't expecting relief any time soon.
AMD also revealed in a regulatory filing that it plans to write down ATI's value by an additional $684 million, which will appear in the quarterly results next week. AMD had previously slashed ATI's value by nearly $2.5 billion. Taken together, the charges now mean AMD believes ATI is worth less than half what AMD paid for it.