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AMD takes an additional $70 million in restructuring charges

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%.

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RE: This isnt good news...
By 9nails on 12/31/2008 9:01:40 AM , Rating: 2
by othercents on December 30, 2008 at 1:08 PM I think the biggest loss that ATI has is the laptop sector especially if people are recommending Intel C2D over the AMD counterpart.

Lets not forget the Apple sector as well, in both desktop and notebook sales.

I believe the latest estimates were holding Apple's market segment at 10% of the world PC market, and 21% of the US market.

Unfortunately AMD has no avenue to compete in this arena.

RE: This isnt good news...
By theapparition on 12/31/2008 11:58:05 AM , Rating: 2
I believe the latest estimates were holding Apple's market segment at 10% of the world PC market, and 21% of the US market.

And you would be incorrect. Those numbers may be accurate for retail sales, but as a total sales market, Apple has less than 5% of PC sales.

It's amazing how statistics can change when just a single word clarifier is left out.

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