AMD is to lay off 500 employees, the second round of job cuts to come from the chip maker this year.
Battered by a resurgent Intel and product delays, AMD has struggled to turn a profit in recent quarters. Last month, the chip maker reported a third-quarter loss of $67m on revenue of $1.8bn - the company's eighth consecutive quarterly loss.
AMD executives hope to recover from their financial troubles, counting on new ATI graphics chips and the company's upcoming Shanghai server processor to turn things around. They are also cutting costs. Earlier this year, AMD announced plans to lay off around 1,600 staff, about 10 percent of the company's workforce at the time. The latest batch of layoffs represents 3 percent of the company's current staff.
In addition, AMD last month reached an agreement to spin off its manufacturing arm to Abu Dhabi's Advanced Technology Investment in a deal valued at $2.1 billion, not including a commitment by ATIC to invest a further $3.6 billion in these manufacturing facilities over the next five years.
The deal should make life easier for AMD, relieving the company from the financial burden of maintaining its own plants. The manufacturing arm, which will be called The Foundry Co, will manufacture AMD processors under contract, according to terms of the deal, which should close in early 2009.
AMD will host an analyst day next week to detail its product roadmaps and discuss the state of its business.
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