Advanced Micro Devices Inc (AMD) is planning to cut as many as 2,340 jobs, or about 20% of its workforce, Bloomberg News reports citing a person familiar with the matter.
The source, who asked not to be identified, told the publication the cuts are expected to be announced as early as this week and that at least 10% of AMD’s staff of about 11,700 will be affected.
This news comes after AMD’s announcement on Monday that its third-quarter revenue likely fell about 10% from the previous quarter. The number two PC processor maker, behind Intel (INTC) previously expected a sequential decline for its 3rd quarter of 1% to 3%. AMD said that the revisions were “due to weaker than expected demand across all product lines caused by the challenging macroeconomic environment.” AMD also lowered its gross margin guidance to 31% from its earlier 44% target, due to an inventory write-down of approximately $100 million.
“With PC demand being so weak, we don’t think the company has any choice but to do some considerable cost-cutting measures,” Betsy Van Hees, an analyst at Wedbush Securities in San Francisco was quotes as saying to Bberg. Cuts of 10 percent to 20 percent are “aligned with what we were hearing from our industry checks as well,” said Van Hees, who declined to name her sources.
Plans for job cuts were reported earlier by CNET and AllThingsD. The latter tech publication reported on Friday that AMD plans to cut as much as 30% of its workforce, which would total about 3,300 jobs and would affect workers in engineering and sales.
Media reports suggest the official announcement could come on October 18th, when AMD announces its quarterly data.
AMD shares dropped 46 cents, or 14.38%, during Friday’s trading session to close at $2.74 per share. On a 52 week-basis [$8.35 printed Mar 27, 2012] the ticker has lost nearly 42% of its value.