AMD Cutting 1100 Jobs
Chip maker Advanced Micro Devices, better known as AMD, is cutting 1100 jobs and imposing top-to-bottom pay cuts on employees as it continues to struggle with slowing sales and the aftermath of the ATI acquisition.
The layoffs will affect roughly nine percent of AMD's international workforce, according to the Associated Press. The company currently employees 15,000 people worldwide but will be spinning off its manufacturing operations, accounting for 3000 employees who won't be affected by the cuts. It's the third major round of layoffs at AMD, which cut a total of 2200 workers in 2008, including 600 in December.
Those left are facing cuts of their own. AMD Chief Executive Dirk Meyer and Executive Chairman Hector Ruiz will both take 20 percent cuts in salary, while other upper-management personnel will drop 15 percent, "other salaried workers" will be cut by ten percent and hour workers will be hit for a five percent reduction in pay. AMD said the cuts will be temporary, but didn't specify when they'll be rescinded.
It's not likely to happen anytime soon. AMD has lost $5.6 billion in the past two years, and analysts are apparently expecting more of the same for some time to come. Along with delays in product launches and its never-ending tussle with larger rival Intel, AMD is still saddled with the debilitating debt of the ill-advised acquisition of GPU maker ATI, a deal that cost the company roughly $5.4 billion. Since then, devaluations have left ATI worth less than half what AMD paid for it. Truly, it was a terrible idea.
And while AMD is hurting, Intel fanboys shouldn't be too quick to gloat: The day before the AMD announcement, Intel revealed that its fourth-quarter sales had dropped 33 percent over the previous year, and that profits were down 90 percent. Things, as they say, are tough all over.