AMD to Cut 10 Percent of Workforce in $200 Million Cost-Savings Push

By CIOinsight  |  Posted 11-04-2011 Print Email
AMD officials say the job cuts are part of a larger initiative aimed at positioning the company to pursue efforts in low-power computing, emerging markets and the cloud.

Advanced Micro Devices will lay off 10 percent of its workforce as part of a larger effort to cut more than $200 million in expenses in 2012.

Executives with the world's second-largest chip maker said Nov. 3 that the cost-cutting moves--which include not only the layoffs but also other efforts aimed at streamlining the operations at the company--are meant to better position AMD to pursue initiatives around low-power computing, emerging markets and the cloud, all areas that the company is putting a particular emphasis on going forward.

The goal will be to take a large portion of the savings gained through the workforce reduction and streamlining efforts and reinvest in R&D and strategic activities in the three primary focus areas.

"Reducing our cost structure and focusing our global workforce on key growth opportunities will strengthen AMD's competitiveness and allow us to aggressively pursue a balanced set of strategic activities designed to accelerate future growth," AMD President and CEO Rory Read said in a statement. "The actions we are taking are designed to improve our ability to consistently address the needs of our global customer base and stake leadership positions in lower power, emerging markets and the cloud."

Company officials said they expect the restructuring effort--which includes not only job cuts but also the cutting of some contracts--will save about $10 million in the fourth quarter and another $118 million in the first quarter of 2012. The layoffs will be completed by the end of the first quarter, and will span all functions and all global regions, according to AMD.

As of July, AMD had about 11,100 employees in 47 locations around the world.

This has been something of a roller-coaster year for AMD, which at the 2011 Consumer Electronics Show launched the first of its long-awaited Fusion processors, which offer CPUs and graphics technologies integrated onto the same chip. The Fusion accelerated processing units (APUs)--which AMD calls the chips--was the result of AMD s $5.4 billion acquisition of graphics-chip maker ATI Technologies in 2006.

At the same show, larger rival Intel unveiled its own processors with integrated graphics, based on its Sandy Bridge architecture.

However, soon after the release of the APUs at CES, Dirk Meyer resigned as AMD's CEO after a falling out with the board of directors over the direction of the company, particularly over the chip maker's relatively slow response to the booming mobile-device market, particularly smartphones and tablets. That set off an eight-month-long search for a replacement that culminated with the hiring of Read, who had been president of PC-maker Lenovo.



 

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