As one of the first big moves after Rory Read assumed the role of AMD president and CEO, the company today announced a restructuring and cost-cutting plan designed to strengthen the company's competitive positioning.
"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," said Read. "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."
AMD will be cutting its global workforce by approximately 10 percent and terminating existing contractual commitments. AMD expects that the restructuring plan will result operational savings, primarily in operating expense, of approximately $10 million in the fourth quarter of 2011 and $118 million in 2012. Based on anticipated savings from the restructuring plan, AMD expects fourth quarter 2011 operating expenses will be approximately $610 million.
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.
AMD says it expects to reinvest a significant portion of the savings to fund initiatives designed to accelerate the company's strategies for lower power, emerging markets, and the cloud.