Reuters
AMD to Cut 15 Percent of Work Force
Thursday November 14, 4:52 pm ET
SUNNYVALE, Calif. (Reuters) - Microprocessor maker Advanced Micro Devices Inc. (NYSE:AMD - News) on Thursday said it will lay off 2,000 employees, or 15 percent of its work force, part of its effort to trim expenses by $350 million in 2003 as sales slump.
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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 on Thursday, AMD said in a statement, with the cuts spanning company operations in the United States, Europe and Asia.
A weak personal computer 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 Corp. (NasdaqNM:INTC - News)
AMD shares were up 3.94 percent, or 25 cents, at $6.59 at the close of trading on the New York Stock Exchange.
AMD Chief Financial Officer Robert Rivet last week warned analysts that layoffs would be required as part of the company's cost-cutting program 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 percent from the third quarter, paced by improvement in sales of flash memory chips, which are widely used in cell phones.
As a result of the job cuts and other actions, AMD expects earnings before interest, taxes, depreciation and amortization -- or EBITDA -- to turn positive in the first quarter and then increase through the year.
[Harry; Given the layoff, management can't possibly see a re-bound any time soon. We are already past the point in the year, when they should ahve their strongest quarter of the year. ] |
