AMD announces layoffs

Advanced Micro Devices plans to lay off 10 percent of its workforce by the third quarter of 2008, in an effort to cut costs as it lowered sales expectations.

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Advanced Micro Devices plans to lay off 10 percent of its workforce by the third quarter of 2008, in an effort to cut costs as it lowered sales expectations.

An AMD spokesman said the layoffs would take place across business units around the world. AMD currently has 16,800 employees worldwide.

"It's an action that will help create a better cost structure and help us return to profitability," he explained.

As a result of the layoffs, AMD expects to take a restructuring charge in the second quarter of 2008.

The company also lowered its revenue expectations for the first quarter "due to lower than expected sales across all business segments", according to a statement. AMD is predicting quarterly sales of $1.5 billion (£759 million), a 22 percent increase compared to the first quarter of 2007.

Analysts polled by Thomson Financial originally predicted net revenue of $1.61 billion. The company will address these issues further on 17 April, when it announces financial results for the quarter.

AMD has been struggling since acquiring graphics vendor ATI in 2006, reporting five consecutive quarterly losses due mostly to charges connected with the acquisition. It reported a net loss of $1.772 billion (£896 million) in the fourth quarter of 2007, which was higher than revenue of $1.770 billion. The net loss included charges of $1.675 billion mostly related to AMD's acquisition of ATI in 2006.

During a conference call announcing the fourth quarter results, AMD chief financial officer Robert Rivet said the company hoped to return to profitability by the second quarter of 2008.

The news comes a week after PC manufacturer Dell said it was cutting 8,800 jobs in an effort to slash costs.

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