Report: AMD Cutting Up to 30 Percent of Global Workforce

AllThingsD reports that AMD may announce next week that it's cutting up to 30-percent of its workforce, or around 2,200 to 3,300 jobs. One source also claims the cuts won't be quite so drastic, ranging from 10 to 20 percent of AMD's workforce which would consist of around 1,170 to 2,300 workers.

Unnamed sources told AllThingsD on Friday that the cuts will affect employees involved with engineering and sales, and will be deep enough to force the chip maker into scaling back some of its product offerings. The current mood within AMD's halls are rather grim, one source said, and that many have expected these job cuts for quite some time.

"There are a lot of nervous people, and not a lot is getting done right now," the source told AllThingsD.

The job cuts may be revealed when AMD announces its quarterly results on October 18. Another source said the job cuts will be completed by October 25, ending a ten-day process. Either way, it would be the second time AMD reduced its workforce since Rory Read took over as CEO. The company trimmed off approximately 10-percent in early 2012 as part of the company's cost-cutting measures.

"AMD expects that the restructuring plan will result in operational savings, primarily in operating expenses, of approximately $10 million in the fourth quarter of 2011 and $118 million in 2012, primarily through a reduction of its global workforce by approximately 10-percent," the company said. "As a result of implementing efficiencies across the company's operations, AMD expects to save approximately $90 million in 2012 operating expenses in addition to the restructuring plan savings, resulting in more than $200 million of expected combined operational savings in 2012."

News of the job cuts arrive after AMD took a tumble in the stock market on Friday. Shares dropped 14.4 percent to $2.74 by the end of the day after the company said on Thursday that it expects third-quarter sales to fall 10-percent from the second quarter. AMD blamed the drop in sales on a weaker-than-expected demand for all of its major product segments. Previously AMD said third quarter 2012 revenue would only decrease 1-percent, plus or minus 3-percent, sequentially.

"The company now expects third quarter gross margin to be approximately 31-percent; less than the previous expectation of approximately 44-percent primarily due to an inventory write-down of approximately $100 million due to lower anticipated future demand for certain products," the company announced. "Third quarter gross margin was also negatively impacted by weaker than expected demand, which contributed to lower than anticipated average selling prices (ASPs) for the company’s Computing Solutions Group products and lower than expected utilization of its back-end manufacturing facilities."

AMD said it will report third quarter 2012 results after market close on Thursday, October 18, 2012.

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  • Benthon
    Never been a fan of AMD, but this bodes well for no consumers.
  • amdfangirl
    How will AMD compete with Intel if they lose more engineers? Sell their engineers to Intel?
  • nieur
    they need to invest in their own fab
  • SteelCity1981
    They have to do what they have to do to keep surviving as a company and if scaling back on the workforce is what they have to do to survive then they have no other option but to do that for the time being until the economy picks back up again. Either that or go under and no one wants to see that because if that happens Intel will stop reducing the price of their processors and it will be like the pre AMD competition years all over again.
  • zanny
    amdfangirlHow will AMD compete with Intel if they lose more engineers? Sell their engineers to Intel?
    AMD already takes in revenue that is less than what Intel spends on R&D alone. The two companies are on completely different tiers of scale.

    nieurthey need to invest in their own fab
    They had their own fab, they spun off Global Foundaries to pay for buying ATI.
  • goodguy713
    I really do hope they pull out of this slump there in but that's a hell of an up hill battle..
    I had a feeling that the new CPUs for October were going to suck more then they claimed when Execs started resigning.

    This should be that indication... they don't expect to sell alot of anything because they are still way behind ivy bridge even with the refresh...
  • de5_Roy
    qualcomm will hire. they already have quite a few ex-amd'ers...
  • Bloob
    Guess my upgrade will be AMD. Gotta support the little guy this time.
  • markem
    Am with you on that :)