Features

Chip-maker AMD to cut 15 percent of workforce

By Matthew Fordahl The Associated Press
Friday November 15, 2002

SAN JOSE — Advanced Micro Devices Inc., battered by weak demand for computer chips and tough competition, said Thursday it will cut 2,000 jobs, or 15 percent of its work force. 

The cuts have been expected since the company announced earlier this year that it would substantially reduce costs and trim its staff in an effort to return to profitability. 

“While painful and unfortunate, today’s action will help to position AMD so that we can take full advantage of the eventual market recovery,” said Hector Ruiz, AMD’s chief executive. 

AMD had 13,187 employees as of the end of September. 

The company wants to reduce its expenses by $350 million in 2003. As previously announced, it will take a fourth-quarter charge of “several hundred million dollars.” 

“Our success is predicated upon a sound financial base,” Ruiz said. 

AMD — the maker of 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 Corp. 

Last week, Ruiz confirmed AMD’s fourth-quarter forecast that sales will 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 closed up 26 cents to $6.59 in Thursday trading on the New York Stock Exchange.