Microprocessor maker Advanced Micro Devices (AMD) said yesterday that it will lay off 2 000 employees, or 15% of its workforce, part of its effort to trim expenses by $350 million in 2003 as sales slump.
The company said it will reduce its global staff by 2 000 positions by the end of the second quarter of 2003, leading to a charge of "several hundred million dollars" in the fourth quarter. The job cuts had been expected. AMD had 13 000 employees at the end of the third quarter.
Some 1 000 employees were notified yesterday, AMD said in a statement, with the cuts spanning company operations in the US, Europe and Asia.
A weak PC market and a build-up of inventories of its Athlon and Duron microprocessors among PC makers and distributors hurt AMD in the third quarter, as did stiff competition from its larger rival, Intel.
AMD shares were up 3.94%, or 25c, at $6.59 at the close of trading on the New York Stock Exchange.
AMD CFO Robert Rivet last week warned analysts that layoffs would be required as part of the company`s cost-cutting programme and said the reductions would be "significant".
Rivet had also said he expected one-third of the restructuring charge to be in cash.
Rivet last week also reiterated the company`s fourth-quarter revenue guidance for an increase of about 20% from the third quarter, paced by improvement in sales of flash memory chips, which are widely used in cellphones.
As a result of the job cuts and other actions, AMD expects earnings before interest, taxes, depreciation and amortisation -- or EBITDA -- to turn positive in the first quarter and then increase through the year.
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