AMD lays off 10% of staff

Posted at: 4:33pm 8th April 2008 by Ben Hardwidge

Sales have been lower than expected across all of its business segments, says AMD

After denying last month’s rumours that it was laying off 5 per cent of its workforce, it turns out that the truth about AMD’s financial situation is worse than expected. In an official statement today, the chip manufacturer said that it ‘plans to adjust its cost structure by reducing its workforce by approximately 10 percent by the end of the third quarter of 2008.’

According to AMD, the move follows ‘lower than expected sales across all business segments,’ implying that sales of ATI GPUs have disappointing, as well as sales of AMD’s Phenom CPUs. The company said that its approximate $1.5 billion revenue for the first quarter of 2008 was ‘down 15 percent compared to the fourth quarter of 2007,’ and that it had ‘previously anticipated first quarter revenue to decline in line with seasonality.’

Accordingly, AMD said that it also planned to record a ‘restructuring charge,’ meaning the expense incurred by restructuring AMD’s facilities, in the second quarter of 2008. However, AMD said that it’s currently ‘unable to determine the estimated amount of the charge as the details are still being finalised.’

According to The Inquirer, AMD’s Dirk Meyer has sent an internal memo to AMD employees to explain the move. In the memo, Meyer apparently says that ‘headcount reductions are among the last actions we would undertake to help AMD recover and achieve our objectives.’

However, he adds that ‘the unfortunate truth is that we have been unable to grow our revenues to justify our cost structure, and the uncertain environment requires us to adjust our cost structure to match lowered revenue expectations.’ The Inquirer also states that Meyer says the reductions will be ‘determined by a review of employee performance, skill requirements and functional needs.’