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AMD announces the job cuts after a brutal Q1 earnings announcement

After confirming it had to reduce expenses, AMD recently announced that it will cut 430 jobs worldwide, which is 2.6% of its workforce.  Around 40 jobs will be cut in AMD's Sunnyvale and Santa Clara, CA offices; 80 jobs in Austin, TX; around 12 in Boston, MA; and 50 in Markham, Ontario.  No workers in Dresden, Germany, location of AMD chip-making facilities, will be laid off. 

The remainder of the job cuts will be spread throughout AMD offices and manufacturing locations around the world.  Most of the jobs will be from marketing, sales and administration, but several engineering jobs will also be cut.

The announcement comes after AMD Chief Executive Hector Ruiz described AMD's recent performance as "unacceptable."  Ruiz said that as many as 800 jobs, the equivalent of 5% of AMD's workforce, would face possible elimination.

"There is no way to sugarcoat our performance in the first quarter," after the company posted a $611 million loss, said Ruiz.

Industry analysts are unsure if AMD will have to cut more jobs in the near future.  "I'm surprised the number is as small as what it is," said Brian Piccioni, a BMO Capital Markets analyst.

American Technology Research analyst Doug Freedman believes the job cuts could "save the company about $40 million per annum in operating expenses and add 8 cents to the bottom-line."

AMD recently detailed its desktop plans for the next year, which the company hopes will help it regain footing in the CPU market.  It recently unveiled Agena FX, a quad-core desktop CPU, and plans on unveiling Phenom FX next week. 

The company remains engaged in a brutal price cut war with Intel.  Intel slashed prices on the Core 2-family late last month, with deeper price cuts expected this summer.  In addition, Intel was able to neutralize an entire year of AMD marketshare gains in one quarter.

While Intel released the Core 2 Duo chip last year, AMD believes its Barcelona technology will offer better performance since it has four cores on a single die.

Intel recently also announced that it will cut another 1,000 employees at a plant where some employees worked on  200mm silicon wafers.

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RE: Core 2 + the ATI purchase
By jpeyton on 5/11/2007 5:32:45 PM , Rating: 4
AMD can't beat Intel at anything, it seems.

Cutting 400+ jobs is a paltry number compared to Intel's planned job cuts of 11,500.

RE: Core 2 + the ATI purchase
By TrogdorJW on 5/11/2007 5:52:35 PM , Rating: 3
Cut jobs by large corporations happen all the time. Then they bring people back in as consultants, or they hire new people elsewhere after a new location is completed. It sucks to lose your job, but that's one of the joys of working for a corporation.

RE: Core 2 + the ATI purchase
By sdsdv10 on 5/11/2007 6:21:36 PM , Rating: 2
It sucks to lose your job, but that's one of the joys of working for a corporation.

I didn't know only people who worked for corporations lost their jobs. I be sure to avoid them next time and have a job for life! ;-)

RE: Core 2 + the ATI purchase
By Dactyl on 5/11/2007 7:04:03 PM , Rating: 5
I only buy all-natural, shade grown CPUs from indigenous silicon farmers. My conscience is clear.

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