Computer Chip Manufacturer AMD to Cut 15% of Workforce as Revenue Slumps
Computer chipmaker AMD (IW 500/157) announced plans Thursday to slash 15% of its workforce in a cost-cutting move in response to a weak market for personal computers.
The California firm also known as Advanced Micro Devices, the No. 2 PC chipmaker behind Intel, said it lost $150 million in the past quarter and that revenues slumped 25% year-over-year to $1.27 billion.
AMD and others have been hit hard by weak sales of PCs as consumers shift to tablets and other mobile devices, a trend moving faster than the industry had anticipated.
"The PC industry is going through a period of very significant change that is impacting both the ecosystem and AMD," said Rory Read, AMD president and chief executive.
"It is clear that the trends we knew would re-shape the industry are happening at a much faster pace than we anticipated. As a result, we must accelerate our strategic initiatives to position AMD to take advantage of these shifts and put in place a lower cost business model."
The move comes a year after another job-cutting plan in which AMD announced it would trim 10% of its workers or 1,400 jobs.
AMD said the new reorganization would start in the fourth quarter and will result in operational savings of some $20 million in the quarter and $190 million in 2013.
"Our restructuring efforts are decisive actions that position AMD to compete more effectively and improve our financial results," Read said.
"Reducing our workforce is a difficult, but necessary, step to take advantage of the eventual market recovery and capitalize on growth opportunities for our products outside of the traditional PC market."
Copyright Agence France-Presse, 2012
