Chipmaker AMD to cut workforce by 15 percent after weak 3Q

AMD Fusion APUThese are evidently troubled times for PC chipmaker Advanced Micro Devices (AMD). With revenue down in the its third quarter, and the outlook for the fourth equally grim, the Sunnyvale, California company has announced a second round of restructuring slated for the coming months that will see its workforce of 12,000 slashed by 15 percent.

Job cuts, site consolidations and other measures will see the world’s second biggest chipmaker make operational savings of some $190 million, Reuters reported on Thursday.

The chipmaker has been struggling for a number of reasons – PC sales have slumped due to a sluggish world economy where people are spending less, while those that do have the buy money for electronics are turning in ever greater numbers to tablet computers and smartphones, an area AMD has up to now failed to exploit. AMD has also been losing market share to the world’s leading chipmaker, Intel.

“The trends we knew would re-shape the industry are happening at a much faster pace than we anticipated,” AMD CEO Rory Read told analysts during a conference call following the release of the third quarter figures.

Read joined AMD in August last year and quickly set to work trying to turn the company around, saving $200 million in operating costs by shedding 10 percent of the workforce. But as this week’s news indicates, the chipmaker still has a mountain to climb to get the company back in shape.

One way would be to build an effective strategy for mobile, and quick. With PC sales not expected to see any significant growth in the coming years, and the tablet market booming, there seems only one way to go. This month AMD made a positive move with the launch of its Z-60 chip for Windows 8 tablets. With a slew of tablets running Microsoft’s new operating system expected to launch in the coming months, this is a great opportunity for AMD, although with Intel going for the same market, it’s going to be no walk in the park for the struggling chip maker.


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