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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 HrilL on 1/17/2009 1:03:33 PM , Rating: 2
You really don't know how things work. First off who does the hiring? The Management. Who hires the managers? The executives.

In the case of CompUSA and Circuit City you say the employees are partly responsible. While that may be true. It is the Managers and Executives jobs to hire these employees so the fault lies solely with them for not hiring good employees.

Circuit City started a downward spiral once they ended commission based sales for electronics and appliances. They lost there good and knowledgeable employees and replaced them with people that don't know anything at all. Sales staff at these kind of stores is the most important part of them since the only way the stores make money is by selling products.

You are so quick to defend these executives for their wasteful spending. We'll use the same example you said. The Auto executives flying to Washington. 3 different jets each costing about $30,000 or more to fly there. That could have payed 2 employees for a year.

What people are sick of is these guys making millions for grinding a company into the ground while the employees end up waiting in bread lines.


"If you can find a PS3 anywhere in North America that's been on shelves for more than five minutes, I'll give you 1,200 bucks for it." -- SCEA President Jack Tretton

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