AMD Plans Layoffs, Will Take Large Charge

The Sunnyvale, Calif.-based company confirmed that layoffs are planned, though it did not provide specific numbers during a conference for financial analysts.

As much as 20 percent of AMD's 13,187 employees could be cut, AMD chairman Jerry Sanders told the San Francisco Chronicle in Thursday's editions.

'The realities are that it is going to be some number in the range of 10 to 20 percent in order for us to get the cost structure down where it needs to be so we can break even at $775 million' in sales, Sanders said.

At the analyst gathering in Sunnyvale, chief executive Hector Ruiz said a significant number of jobs will be cut, but declined to give specific numbers until employees were informed.

AMD, which makes Duron and Athlon microprocessors as well as flash memory chips for cellular phones and other devices, has been struggling in recent quarters because of the weak economy, product delays and stiff competition from its larger rival, Intel.

Ruiz, however, confirmed AMD's guidance for the fourth quarter. In October, the company said it expects sales to increase 20 percent or more above the third quarter, which ended Sept. 29.

For the third quarter, the company lost $254.2 million on sales of $508.2 million _ compared with a loss of $187 million on sales of $765.9 million in the same period last year.

Earlier this year, AMD pushed back the release of its next-generation desktop processors by several months.

Shares of AMD were down 41 cents, to $6.82, in Thursday trading on the New York Stock Exchange.

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