AMD cuts 20% of workforce

Chip maker Advanced Micro Devices (AMD) plans to cut as many as 2,340 jobs, or about 20% of its workforce

Chip maker Advanced Micro Devices (AMD) plans to cut as many as 2,340 jobs, or about 20% of its workforce.

The cuts are expected to be announced as early as next week, according to Bloomberg, citing an anonymous source as the plans are not yet public.

CEO Rory Read has already lowered the headcount since he was appointed in August 2011. In November 2011, AMD cut 10% of workforce to reduce costs.

Last week AMD announced it is expecting a 10% decline in sales in Q3 compared with Q2, ahead of the announcement of third quarter results on 18 October.

“The lower than anticipated preliminary revenue results are primarily due to weaker than expected demand across all product lines caused by the challenging macroeconomic environment,” AMD said.

AMD expects third quarter gross margin to be 31% less than the previous expectation of 44%. This is mainly because of an inventory write-down of around $100m, due to lower anticipated future demand.

Rival chipmaker Intel also reduced its Q3 forecast, citing reduced demand from the PC market and slowing demand from emerging markets.

In the third quarter of this year, total global PC shipments fell 8.3%  compared with the same period a year ago to 87.5 million, according to research firm Gartner.

In the next year, Gartner predicts tablet sales will increase 53%, but says 2012 figure of 118,883 will more than treble by 2016.

Windows 8, due to be released on 26 October, may boost flagging PC sales, but it may also further accelerate the sales of tablets and other new form factors because it is also designed to work on ARM processors developed for the next generation of mobile computing devices.

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