AMD Announces 15% Cut in Workforce

Features Reuters

PC chipmaker Advanced Micro Devices said it will cut its workforce by 15 percent in a bid to reduce operating expenses, its second round of layoffs in less than a year as it struggles with a weak global economy and a consumer shift toward tablets.

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The chipmaker, with a staff of nearly 12,000, said in a statement it expects its restructuring actions, which will also include site consolidations, to result in operational savings of $190 million next year. It expects to record a restructuring expense in the fourth quarter of about $80 million.

Like its larger rival Intel, AMD was caught flat-footed in recent years with the emergence and fast growth of mobile devices like Apple's iPad.

Tablets and smartphones, once considered a niche market by Intel and others, are fast gaining favor with consumers and eating into sales of laptops and desktop computers, while a slowing global economy is dampening spending in general.

AMD posted third-quarter revenue of $1.27 billion, down from $1.69 billion a year ago and a net loss of $157 million, or 21 cents a share, compared with a year ago profit of $97 million, or 13 cents a share.

Analysts had expected AMD to post $1.28 billion in revenue for the third quarter, according to Thomson Reuters I/B/E/S.

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AMD estimated fourth-quarter revenue would fall 9 percent from the third quarter, plus or minus 4 percent.

AMD's stock rose 3.4 percent in extended trade after closing down 5.41 percent at $2.62.