AMD Axes 500 Employees

"We can confirm a worldwide reduction of 500 positions across various departments, levels and locations," an AMD spokesperson said in an e-mail statement. "As laws vary by country, the notification process also varies. The vast majority of affected employees were notified yesterday."

The move follows last month's third-quarter earnings release in which AMD, Sunnyvale, Calif., reported revenue from continuing operations of $1.776 billion, including process technology license revenue of $191 million. Third-quarter 2008 revenue increased 32 percent vs. the second quarter of 2008 and 14 percent compared with the third quarter of 2007. In the third quarter of 2008, AMD reported a loss of $67 million.

Just ahead of its earnings release, AMD announced it was dividing the company into two businesses: one company that focuses on microprocessor design and another that will manufacture them.

As part of the split, AMD is launching a new company, dubbed The Foundry Company, a pairing between AMD and Advanced Technology Investment. That company is creating a new U.S.-based semiconductor manufacturing company in New York. The Foundry Company, which also includes a massive investment from Mubadala Development, will focus on the growing demand for independent foundry production capabilities, according to AMD.

The move was intended to stave off further losses and to more effectively compete with top rival Intel. AMD said that the New York facility will create more than 1,400 direct jobs and generate an additional 5,000 jobs in the region. There is no word on whether the latest job cuts involve the New York location.

AMD had already laid off 1,600 workers in April to stop bleeding money and at the time warned of more cuts.

"The decrease is due to lower-than-expected sales across all business segments," the company said in a statement. "AMD announced plans to adjust its cost structure by reducing its workforce by approximately 10 percent by the end of the third quarter of 2008."

The company went through more turbulence in July when it named president and COO Dirk Meyer as the company's new CEO. Meyer took the reins from Hector Ruiz, who was tapped as the executive chairman of the company and became chair of the board of directors.