AMD gives 500 staffers the boot

Chipmaker AMD is handing over termination letters to as many as 500 employees, citing the economic slump as reason. Last April, the company had cut as many as 1,600 staffers.

The pink slips would mean that the company will see almost three percent of its overall workforce move out of its rolls. Announcing the decision, AMD said it would go ahead and split the company into two businesses. While one of them will focus on microprocessor design, the other will go into manufacture of microprocessors.

AMD will launch a new company called The Foundry Company by merging itself and Advanced Technology Investment. This company is expected to create a new US-based semiconductor manufacturing company in New York. It is being said that The Foundry Company, which would bring in huge investments from Mubadala Development and will concentrate on the growing demand for independent foundry production capabilities.  I fact, the new division is seen as a strategy toward reducing further losses. The division may also help AMD compete with more vigour against top Intel contenders, said a report.

Even as the job cuts are being seen as a concern, the New York facility is expected to create more than 1,400 direct jobs and generate an additional 5,000 jobs in the region.

The chipmaker giant made the job cut announcement at its meeting to make public its third quarter earnings, which stood at $1.776 billion, including process technology license revenue of $191 million. There was an increase of 32 percent in the third quarter as against the second quarter of 2008 and 14 percent compared with the same quarter of 2007. AMD had reported a loss of $67 million in the third quarter of 2008. Attributing the decrease to lower-than-expected sales across all business segments, AMD said that it would adjust its cost structure by reducing its workforce by approximately 10 per cent by the end of the third quarter of 2008. This could mean that more job cuts are in the anvil.