AMD and ATI have not enjoyed the success the two firms envisioned when AMD bought the graphics firm in 2006. AMD is hurting due to the global economy and announced this week that it will take an additional restructuring charge related to the $5.4 billion is spent to purchase ATI.
AMD says that it also laid off 100 more employees than it had originally announced bringing the total laid off over the quarter to 600.
As a result of the additional layoffs, AMD is recording $70 million in restructuring charges rather than the $50 million in charges it has expected. The chipmaker also says that the new cost reduction would result in additional charges though the first half of 2009, though the firm did not specify what the additional charges would be.
EWeek reports that AMD will take an additional goodwill impairment charge related to the ATI purchase from 2006. AMD says that the charge is based on an updated, long-term financial outlook. This isn’t the first impairment charge AMD has taken in relation to the ATI purchase, in June of 2006 AMD took a charge totaling $800 million. AMD will also take a $20 million impairment charge on an investment in flash maker Spansion.
AMD announced in early December that it was cutting revenue forecasts by 25%.
quote: In his widely read "20 Surprises for 2009" published Monday, Doug Kass compiles a list of what he calls outliers, events that have a reasonable chance of occurring next year despite their long odds. Kass puts and AMD bankruptcy filing on his list, citing a general lagging of tech stocks in 2009 as capital spending by companies loses ground to maintenance expenditures.