AMD takes axe to staff numbers

 

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By Reuters

Posted on 6 Nov 2008 at 08:54

AMD has slashed 500 jobs, as the processor company moves to cut costs.

The company says the job cuts are part of major restructuring plans aimed at reducing expenses. The plans have already seen the company spin off its manufacturing arm.

AMD says the plans pre-date the economic troubles and are part of an approach it is calling "going asset light."

"We were expecting the company to initiate some cost-cutting. In a move toward asset light it needs to become a leaner company and we view this as a positive step," says JoAnne Feeney, an analyst with FTN Midwest.

AMD has also announced that 3,000 more jobs will be moved early next year to The Foundry Company, the $5.7 billion spin-off of its manufacturing plants in a joint venture with Abu Dhabi.

That venture will give AMD a cash injection and shrink its debt to better compete against larger rival Intel.

Advanced Technology Investment Company (ATIC), the Abu Dhabi firm, also committed to investing another $3.6 billion to $6.0 billion over five years to fund the venture's expansion.

The 3,000-person new company will hold AMD's two plants in Dresden, Germany and make all of its central processing units, as well as chips for other companies.