AMD lays off 500 staff as financial troubles continue

Advanced Micro Devices Inc. plans to lay off 500 staffers, the second round of job cuts to come from the company this year.

"We can confirm a worldwide reduction of 500 positions across various departments, levels and locations," AMD spokesman Mike Silverman said in an e-mail. Most of the affected employees were notified on Wednesday, he said.

Battered by a resurgent Intel Corp. and product delays, AMD has struggled to turn a profit in recent quarters. Last month, the chip maker reported a third-quarter loss of $67 million on revenue of $1.8 billion -- the company's eighth consecutive quarterly loss.

AMD executives said the company hopes to recover from its financial troubles and is counting on new ATI graphics chips and its upcoming Shanghai server processor to turn things around. AMD is also cutting costs. Earlier this year, it announced plans to layoff around 1,600 staffers, about 10% of its workforce at the time. The latest batch of layoffs represents 3% of the company's current staff.

In addition, AMD last month reached an agreement to spin off its manufacturing arm to Abu Dhabi's Advanced Technology Investment Co. (ATIC) in a deal valued at $2.1 billion, not including a commitment by ATIC to invest a further $3.6 billion in the manufacturing facilities over the next five years.

The deal should make life easier for AMD, relieving the company from the financial burden of maintaining its own plants. The manufacturing arm, which will be called The Foundry Co., will manufacture AMD processors under contract, according to terms of the deal, which should close early next year.

AMD will host an analyst day next week to detail its product road maps and discuss the state of its business.

Copyright © 2008 IDG Communications, Inc.

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