Advanced Micro Devices said Friday that it would cut 1,100 jobs, slash employee salaries and suspend benefits in order to reduce costs in the weakening economy.
AMD's "product company," defined as AMD minus the recently spun-off manufacturing holdings dubbed The Foundry Company, would "reduce its global workforce by approximately 9 percent through a combination of attrition, the previously communicated divestiture of the handheld business and an additional headcount reduction of approximately 900 positions," an AMD spokesperson told ChannelWeb.
AMD laid off some 500 employees last November and more than 2,000 total in 2008. The struggling chip maker last had a profitable quarter in the third quarter of 2006.
"As a result of the continuing global economic downturn, we have determined that we need to take difficult, but prudent actions designed to reduce our costs," the spokesperson said in an e-mailed response to queries about the downsizing.
AMD also said in a Friday statement that it would take a $622 million charge for the fourth quarter related to its $5.4 billion acquisition of graphics chip maker ATI in 2006. The Sunnyvale, Calif.-based company also announced the filing of an additional asset impairment charge of $62 million for the quarter. The $622 million charge follows earlier ATI-related impairment charges of $880 million and $1.77 billion in the past few years.
As part of AMD's cost reduction strategy, the company announced that Chairman Hector Ruiz and Chief Executive Dirk Meyer will take a temporary 20 percent salary cut. U.S. and Canadian managers at the vice president level and higher will take a 15 percent pay cut, the spokesperson confirmed.
In addition, salaried North American employees will take a 10 percent pay cut while hourly workers will have their wages reduced by 5 percent. AMD also plans to suspend matching its employees' 401(k) contributions in the U.S. and delaying implementation of the Registered Retirement Savings Plans (RRSP) company match program in Canada, where its ATI Graphics Products Division is based.
AMD employees outside of North America will also be asked to take voluntary pay cuts, according to the spokesperson.
"These actions, while difficult, will allow AMD to better navigate the turbulent economic conditions while protecting our core capability to execute our technology roadmaps and position AMD for long-term success," the spokesperson said.
This article has been updated.
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