Embattled AMD will cut 1,100 people and impose mandatory pay cuts on all North American employees. The figure is approximately 9 percent of its global workforce. The good news is that some of the layoffs will come through attrition, so not everyone will be seeing pink slips.
The cuts start from the top, as Executive Chairman and former President Hector Ruiz will see a 20 percent cut in his salary. Many analysts and investors blame Ruiz as the cause of the downfall of AMD, which for a time held a sales and technology lead over Intel in several key sectors. After his seventh consecutive quarterly loss, he was replaced as CEO by Dirk Meyer, who will also see a 20 percent pay cut.
Senior North American executives that are vice presidents or higher will see a 15 percent pay cut. Salaried workers will see a 10 percent cut, while hourly workers will face a 5 percent wage reduction. AMD will also halt its 401(k) matching program.
Last month, AMD took a $70 million charge after laying off 600 workers.
Longtime veterans of AMD have been longing for the good old days of Jerry Sanders, who led AMD for over 30 years. Despite going through several difficult recessions, he often refused to lay off employees, having seen the effects of layoffs that had occurred at Fairchild Semiconductor. Instead of cutting employees, he instituted efficiency programs, such as working on Saturdays and longer shifts.
AMD will also take an additional $622 million write-off on its purchase of ATI, after a $800 million impairment charge last year. AMD paid $5.4 billion to takeover ATI, which it sees as critical in its plans for Fusion products to compete against arch nemesis Intel.
Many layoffs have been announced in the last month, including Logitech, Seagate, and mighty giant AT&T. Earlier today, Circuit City announced that all 30,000 employees will lose their jobs.
quote: In the end, the individual workers weren't the one that allowed the company to slip into a weakened position , but they are the first to feel the effects. That is backwards, and it is a practice that does nothing to promote action by the executives...
quote: When I hear about a company about to lay off 3,000 workers, while the executive compensation doesn't change, I get pissed.
quote: If an individual employee is not up to task as far as his job is concerned, then he should be replaced.
quote: No. It's management that makes that decision. Who decides what the management is supposed to do, and what policies they are supposed to enforce? The executives.
quote: But that's still the fault of the executives for not implementing a proper policy to deal with them,
quote: So, Comp USA and Circuit city going under was still the fault of the executives. Employee training and hiring policy are still decided by them. Poor customer service IS their fault.
quote: I simply said that if executives feel the need to reduce their work force, they should also feel the impact personally.
quote: They will run out of cash in Nov of this year if they hit their estimates, which they won't
quote: The cuts start from the top, as Executive Chairman and former President Hector Ruiz will see a 20 percent cut in his salary.