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Mandatory pay cuts for everyone else in North America

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.



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By Etsp on 1/17/2009 12:56:49 PM , Rating: 5
If an individual employee is not up to task as far as his job is concerned, then he should be replaced. Does that employee make that decision? 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.

Yes, having bad low level employees sucks. But that's still the fault of the executives for not implementing a proper policy to deal with them, or not ensuring it's being enforced by the management they hired. Being at a high level job like that, with great benefits, means they should be also facing the risks in the market.

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.

I never said that lay-offs were inherently bad or evil, I simply said that if executives feel the need to reduce their work force, they should also feel the impact personally.


By FITCamaro on 1/17/2009 2:35:17 PM , Rating: 2
While an employee certainly should feel personally responsible for knowing how to do his job and knowing about the products they're selling, to me in the end it does come down to management. Good management shouldn't hire (or retain) employees who now only don't know what they're selling but also do not take at least a little pride in their jobs.


By FITCamaro on 1/17/2009 2:36:46 PM , Rating: 2
Let me also add that while obviously employee turnover should be kept under control, at least when I was working there, there was no shortage of people who wanted to. Teenagers loved working at Best Buy to get the discount on stuff.


"And boy have we patented it!" -- Steve Jobs, Macworld 2007

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