AMD (NYSE: AMD), the perpetually badly run chip company, will cut 10% of its workers. The firm has labored in the shadow of larger rival Intel (NASDAQ: INTC) for over a decade. AMD’s trouble has been compounded by poor management. It recently took the company’s board several months to find a new CEO
AMD expects that the restructuring plan will result in operational savings, primarily in operating expenses, of approximately $10 million in the fourth quarter of 2011 and $118 million in 2012, primarily through a reduction of its global workforce by approximately 10% and the termination of existing contractual commitments. The workforce reduction will occur across all functions globally and is expected to be substantially completed by the end of the first quarter of 2012. Based on anticipated savings from the restructuring plan, AMD expects fourth quarter 2011 operating expenses will be approximately $610 million.
The action may help short-term but AMD’s inability to diversify much beyond the struggling PC business insures this is not the last time it will have to cut costs.
Douglas A. McIntyre
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