Drastic job cuts at AMD
Chip manufacturer AMD has announced the layoff of 10 per cent of its employees. In a report submitted to the US Security and Exchange Commission, the firm states that sales in the first quarter of the current fiscal year did not meet expectations. In the past few quarters, Intel's competitor has repeatedly had to report losses and has suffered a number of technical problems in production.
AMD planned to re-enter the black by the third quarter of the current fiscal year. While sales revenue did increase by 22 per cent to $1.5bn, that figure also marks a drop of 15 per cent compared to Q1 2007, a decrease that AMD says cannot be explained by seasonal effects. On April 17, AMD plans to publish its official quarterly report. Investors have already reacted to the bad news, with shares of AMD dropping by 2.69 per cent in after-hour trading.
AMD now plans to improve its cost structure by cutting 10 per cent of its staff. The layoffs are expected to be completed by the end of the third quarter, with expenses for this restructuring being reflected in the figures for the second quarter. At the moment, AMD says it cannot specify these expenses because the details of the layoffs have not been agreed; AMD currently employs some 16,000 people. At the moment, it is not clear how many people will be laid off at AMD's plants in Germany.