AMD cutting 10 percent of workforce, Q1 revenue sags
About 1,650 jobs will be lost as a result of AMD's pressing need to get its business profitable this year. The first quarter, with lower-than-expected revenue, was no help.
AMD will cut up to 10 percent of its workforce by the end of the third quarter of 2008, as it struggles to return to profitability with slowing sales.
The company announced the workforce moves Monday after the close of the stock market, two weeks after denying such a cut had already taken place. AMD also warned investors that first-quarter revenue is going to be $1.5 billion, about $100 million less than what Wall Street analysts were expecting for the quarter. "The decrease is due to lower than expected sales across all business segments," the company said in a release.
AMD is finally starting to get its Barcelona processor out into the market, after almost a year's worth of delays, but it's not clear that Barcelona had much of an impact on its first-quarter performance, given that systems using Barcelona aren't expected to become available until early in the second quarter.
The next several quarters will play a huge role in determining the future of AMD CEO Hector Ruiz, who has promised to get the company back to profitability in the second half of the year. One surefire way to cut costs is to cut jobs, and about 1,650 employees are now expected to be looking for work later this year.