AMD To Cut Workforce By 10%

Advanced Micro Devices, which has reported losses in the last five quarters, said Monday it would reduce its workforce about 10% by the end of September.

The number represents approximately 1,600 employees out of its worldwide workforce of 16,000 people. As a result of the reduction, AMD expects to record a restructuring charge in the second quarter but said it couldn't estimate the amount because details are still being finalized. AMD plans to release first-quarter financial results April 17.

In addition, AMD said it expects revenue for the first quarter, ended March 29, to be $1.5 billion, a 22% increase over the same period a year ago. Compared with the fourth quarter of 2007, revenue fell 15%.

The decrease was caused by lower-than-expected sales across all business segments, AMD said. The decline was more than expected. AMD had forecast a decline in the first quarter that was in line with seasonality.

AMD in January reported that losses widened in the last quarter of 2007 to $1.77 billion, mostly because of charges related to the 2006 acquisition of graphics chipmaker ATI Technologies. The net losses were nearly triple the losses reported during the same period in 2006, and the fifth consecutive quarterly loss.

Nevertheless, AMD executives have said they are confident that the company would return to profitability in the second half of the year, driven primarily from new products, including the introduction of the company's first 45-nanometer microprocessors, expected in the second half of this year.

The manufacturing process used in building the chips shrinks the size of the transistors to 45 nanometers, which means more transistors on each processor and therefore more power at the same level of energy consumption. Intel has been shipping 45-nanometer processors since the fourth quarter of last year.