Days after warning of a huge sales and earnings miss,
chipmaker Advanced Micro Devices is close to announcing a significant
reduction in its workforce that could be be made public as early as next
week.
According to sources familiar with the company’s plans, (they asked
not to be identified), AMD will announce next week that it will cut
between 20 percent and 30 percent of its employees, which, given AMD’s
headcount of about
11,70011,100 workers, would amount to between 2,200
2,300and 3,300
3,500jobs.
The cuts, the sources said, will affect employees involved in
engineering and sales, groups of employees that have been spared in
previous rounds of cuts. Additionally, these people, who are familiar
with the company’s operations, suggest that the cuts will be deep enough
as to indicate that AMD may be forced to scale back some of its product
offerings.
The cuts might be disclosed when AMD announces its quarterly results
on Oct.18, or the announcement could come on Oct. 25, sources said. One
source said the cuts may be completed by the 25th, at the close of a
10-day process.
CEO Rory Read is said to have brought in a team of business
consultants from McKinsey & Company and BCG to advise the company.
McKinsey’s role is said to involve handling the cuts, while BCG is said
to be consulting on what one source described as a “grand strategy” to
take the company forward.
One source described the mood within AMD as grim. Employees have been
expecting the cuts for some time. “There are a lot of nervous people,
and not a lot is getting done right now,” the source said.
A third source said that the scale of cuts may be lower, closer to
between 10 percent and 20 percent of AMD’s workforce, which would imply a
range of between 1,170 and 2,300.
An AMD spokesman declined to comment.
This would be the second major reduction in AMD’s workforce since Read took over as CEO. The company announced a 10 percent reduction
11 months ago. Those cuts amounted to about 1,400, and were necessary,
the company said at the time, to reduce operating expenses by $118
million in 2012, and by $10 million in the fourth quarter of 2011.
Last month, CFO Thomas Seifert was the latest to leave; he is, according to an informal count tabulated by
AllThingsD the 26th from among the company’s senior ranks to depart since Read, a former executive at IBM and Lenovo, took over as CEO.