Chipmaker AMD cutting 7% of global workforce amid struggles
AMD employed 10,149 people as of end of third quarter; plans to cut jobs by end of its fourth quarter
SUNNYVALE, Calif.—Semiconductor maker Advanced Micro Devices, Inc., better known as AMD, announced plans to cut seven per cent of its global workforce in an effort to improve its profitability.
The Sunnyvale, Calif.-based chipmaker has been dealing with weaker revenue and profits for some time and posted third-quarter results this week that missed market expectations.
The company expects the reductions and related real estate moves will save US$85 million in 2015.
AMD employed 10,149 people as of the end of its third quarter.
It plans to cut the jobs by the end of its fourth quarter.
The company will take a US$57-million charge, largely for severance, during that final quarter.
Shares of AMD fell nearly five per cent to US$2.51 in extended trading following the announcement Oct. 16.
The stock is down by nearly one-third in the year to date.
It is the first move by AMD’s new CEO, Lisa Su, a former chief operating officer who replaced Rory Read just over a week ago.
AMD also said it earned US$17 million in its most recent quarter.
A year ago the company earned US$48 million.
The chipmaker posted revenue of US$1.43 billion in the period, down from US$1.46 billion last year and also short of Wall Street forecasts.
Analysts expected US$1.47 billion, according to Zacks Investment Research.
For the fourth quarter, AMD expects revenue to decrease 13 per cent, plus or minus three per cent, from the third quarter.
Analysts surveyed by FactSet Research Systems Inc. expect revenue of US$1.48 billion, which implies growth of 3.7 per cent.