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AMD to cut global workforce by 7%
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UNITED States-based chipmaker Advanced Micro Devices Inc (AMD) said it plans to cut 7 percent of its global workforce in a bid to boost profitability.
The California company has been dealing with weaker revenue and profits for some time, and on Thursday posted third-quarter results that missed market expectations.
It said the staff cuts and related real estate moves will help it to save US$85 million next year.
AMD employed 10,149 people as of the end of its third quarter. It plans to cut the jobs by the end of its fourth quarter, and will take a US$57 million charge, largely for severance, during that period.
AMD shares fell nearly 5 percent to US$2.51 in extended trading following the announcement. At the end of trading on Thursday, the stock was down by nearly a third in the year to date.
It is the first move by AMD’s new Chief Executive Lisa Su, a former chief operating officer who replaced Rory Read just over a week ago.
AMD also said that it earned US$17 million, or 2 cents per share, in its most recent quarter. Its earnings, adjusted for amortization costs, came to 3 cents per share. Analysts surveyed by Zacks Investment Research were anticipating earnings of 4 cents per share. A year ago the company earned US$48 million, or 6 cents per share.
The chipmaker posted revenue of US$1.43 billion in the period, down from US$1.46 billion last year and also short of Zacks forecasts.
For the fourth quarter, AMD expects revenue to call 13 percent, plus or minus 3 points, from the third quarter. Analysts expect revenue of US$1.48 billion, which implies growth of 3.7 percent.
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