Amd cuts jobs after business slump

Amd cuts jobs after business slump

There was a loss of 157 million dollars after a profit of 97 million dollars a year ago. Now 15 percent of jobs are to be cut, the company announced after the US stock market closed on thursday. AMD recently had around 11,000 employees.

This means that the job cuts are somewhat smaller than recently speculated. In u.S. Media reports, rough orders of magnitude between 20 and 30 percent had been mentioned over the weekend. However, it is not over yet: in the first half of 2013 there will be further steps for restructuring, AMD announced. The rebuild could entail a "considerable" financial burden – a sign that it could be a radical action.

The current job cuts will initially impact the balance sheet by 80 million dollars, AMD announced. Savings are expected to be $20 million in the current quarter and $190 million next year. The stock exchange clearly lowered the thumbs to the plans with a minus of over seven percent to 2.43 dollars in early new york trading.

CEO rory read announced that AMD would focus more on areas outside the classic PC business. Currently, about 85 percent of AMD’s revenue comes from it, and he wants to reduce that to 50 to 60 percent. Chips for servers, game consoles and tablet computers are to take care of this. "We clearly failed to meet expectations," read conceded with a view to the past quarter. The shrinkage is expected to keep AMD out of the red in a year’s time, even with quarterly sales of $1.3 billion.

The forecast for the current quarter was not very encouraging. AMD expects sales to fall by nine percent compared to the previous quarter, with a fluctuation margin of four percentage points more or less.

The chip company is hard hit by the slump in the PC business. Even the big rival intel recently presented weaker figures. With its market share of around 80 percent, however, it is coming through the dry spell much better than AMD, which has been in crisis for a long time. PC sales were down more than eight percent in the third quarter, while smartphone and tablet sales are booming. But they use almost no processors from intel or AMD. Instead, the market is dominated by chips based on the architecture of the british chip developer ARM.

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