AMD slashes 1,100 jobs

 

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By Reuters

Posted on 19 Jan 2009 at 08:52

AMD is to slash 1,100 jobs and cut wages across the board, as it continues its aggressive push to cut costs.

The company says the job cuts will reduce its product company workforce, excluding foundry workers, by 9% and will come from natural attrition, the divesting of its handheld business and the elimination of another 900 positions. Further details were not revealed.

Wage decreases range from 20% for its two top executive to 5% for lower-level employees in North America and voluntary pay cuts in other regions.

Alongside the job and wage cuts, the company has also announced that it will write a further $622 million off the value of ATI, bringing total writeoffs for the deal to $3.17 billion.

The company paid $5.4 billion for ATI in 2006, and warned in December it would have to take an additional charge after taking an initial $800 million impairment charge.

But analysts say the extent of the writedown is not a shock because it reflects the recent decline in AMD's share price rather than the performance of its graphics chips business.

"In fact graphics, which is 20% of the business, is outperforming microprocessors," says Dryden. "It's taken share from Nvidia in the last couple of quarters. I expect that to extend into the first half of 2009 despite the weak economy," says Charter Equity Research analyst John Dryden.

AMD does not say how much money it expects to save from the actions and a spokesman declined to comment beyond the email.