Wednesday, December 31, 2008

AMD raises tally for job cuts, write-downs

Advanced Micro Devices Inc. will cut 100 more jobs worldwide and spend $20 million more in fourth-quarter restructuring costs than originally planned, the company said.

In a securities filing late Monday, the chipmaker said it will end up laying off 600 people in the quarter, more than 3 percent of its work force, and paying $34 million in severance costs.

When it announced the layoffs in November, AMD said 154 of the cuts would be in Austin, where it has about 2,300 workers. A spokesman said Tuesday there had been no significant change in that number.

The chipmaker has set a goal of breaking even when revenue reaches $1.5 billion a quarter and has been cutting costs to achieve that aim. It has been losing money for two years.

In April, it cut its work force by 10 percent.

In the new filing, the company said it will take a $70 million charge for restructuring costs in the fourth quarter, up from the earlier forecast of $50 million.

Aside from costs related to the layoffs, the company said it was taking a $17 million charge for the reduced value of certain assets.

That number could grow: AMD said it expected to take another charge, yet to be calculated, for the value of ATI Technologies Inc., a graphics chip maker it bought in 2006 for

$5 billion.

AMD also said it was taking a $20 million charge for the reduced market value of Spansion Inc., the spinoff of a flash memory joint venture with Fujitsu. AMD said the charge reflected the 85 percent drop in Spansion's stock price during the fourth quarter.

Other factors in the charges included $13 million due to the termination of contracts or programs and $6 million because of facility consolidations or closures.

AMD shares closed Tuesday at $2.21, up more than 5 percent.

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