AMD's belt-tightening continues: as well as measures that resulted in a 7 per cent drop in operating costs last quarter, the company is claimed to be about announce job losses that will see over 2,000 workers lost from the sales and engineering divisions.
Not yet confirmed by AMD itself, the claims come from anonymous sources speaking to AllThingsD
and state that between 2,200 and 3,300 employees - around 20 to 30 per cent - will be laid off from the sales and engineering divisions. The claims come days after AMD reported a whopping 10 per cent quarter-on-quarter drop in revenue and a serious 13 point drop in margins
If true, the cuts are a serious indication that AMD is struggling. Previous job cuts at the company have spared the sales and engineering divisions, for obvious reasons: without engineers, the company will never be able to develop its products to the point where it can offer a truly competitive alternative to Intel chips at the high end, and without sales staff it becomes significantly harder to sell existing products in order to fund future development.
Official confirmation of the cuts is expected by the end of the month, with AMD refusing to comment on 'rumours or speculation
' at the present time.
Investors haven't reacted to the rumours with the same calm as the company's revised quarterly earnings report: following publication of the rumours, AMD's share price dropped from $3.20 to just $2.74 - a drop of over 14 per cent. While the cuts may be necessary to ensure the company's continued survival, it's clear investors are concerned that - coupled with a 10 per cent drop in headcount announced earlier this year - the move may leave AMD understaffed and unable to offer Intel the competition required to make an impact in the market.