AMD prepares layoffs amid poor Q3: 30 percent staff at risk

AMD prepares layoffs amid poor Q3: 30 percent staff at risk

Summary: AMD may lay off up to 30 percent of its global staff, days after the troubled chip-maker said its third-quarter may underperform in the face of weak demand and excess inventory.

SHARE:

AMD may be preparing to cut up to 30 percent of its global staff, reports sister-site CNET, as the embattled chip maker continues to struggle in the highly competitive chip-making sector.

According to CNET's Shara Tibken, the processor maker could let go as much as 20--30 percent of its employees, citing people familiar with the matter. However, the expected layoffs could also be considerably lower.

AMD said at last week's preliminary earnings forecast that it would cut its revenue outlook for the third quarter, citing "weaker than expected demand" across all of the firm's product lines.

The news comes only days after that PC arch-rival Apple has snapped up former AMD chip veteran Jim Mergard, who had previously spent 16 years at the chip maker. Mergard was behind the development team that created the low-power "Brazos" mobile accelerated processing unit (APU).

Earlier this year, Sterne Agee analyst Vijay Rakesh warned that AMD was facing a tough second-half of 2012 as rival chip-maker Intel and graphics card maker Nvidia continues to grab increasingly large chunks of the semiconductor market share in the run-up to the release of Windows 8, expected later this month

Intel, the firm's main rival, also warned that its third quarter was not going to be a pretty sight, suggesting the processor and semiconductor industry is facing global difficulties in the wake of the euro zone crisis and the wider "challenging macroeconomic environment."

However, Intel's anti-competitive behavior in recent years also hurt AMD's sales. In April, Intel said it would appeal a €1.06 billion ($1.4bn) antitrust fine imposed by the European Union, after Intel was charged with blocking AMD in the market and attempting to delay or cancel product launches that include AMD chips. 

AMD may report the expected job cuts as soon as Thursday when the firm is announcing its third quarter earnings. The chip maker expects to see a decline in sales by 10 percent, compared to the same quarter a year ago. On the flip side, tablet sales are growing by close to 70 percent per year. 

Topics: Processors, Intel, Tech Industry, Windows

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

7 comments
Log in or register to join the discussion
  • AMD

    We knew yee well...
    NoAxToGrind
  • Now only if...

    The EU would give that antitrust fine to AMD. The reason why I hope Microsoft tells the EU to go play with themselves is because all their fines do is prop up the bureaucrats. That should go to those that were actually hurt. But then again, that would make Opera have a higher market cap than Mozilla and close to Google. So was anyone but an underperforming competitor hurt there? But the Intel money would sure help AMD. instead, it will go to make up for the money they can't get from the Spanish or the Greeks. And Google, get ready. Order a LOT of Vaseline!
    jwspicer
  • Luckily...

    the Europeans don 't use feelings to sway court decisions like in America. It's amazing that Microsoft got away Scot-free when Judge Kollar-Kotelly blew it way back when.
    Tony Burzio
  • It's a shame really

    If Intel is the only supplier of x86, they are going to go back to their lazy ways. P4 D/E comes to mind. The only thing this is going to do is speed the uptake of ARM.
    happyharry_z
  • Truly sad

    If AMD goes under. I have always bought AMD when I could, as your bang-for-the-buck was always better than with Intel. In recent times that gap has closed, and I guess it is really hurting AMD.
    trybble1
  • Get out there and buy some ATI/AMD stuff

    Intel/nVidia need more competition, not less. Support AMD. I just bought a new 7000 series ATI/AMD video card and am about to order an A8 CPU/Mobo and AMD ram. Buy buy buy!
    johnnydoe1894
  • Hope they make it through

    I love AMD products. Yes, they are usually not as 'good' as Intel when it comes to performance, but that is relative to what one needs. I built my desktop with a Phenom X6 1055T two years back and loved it everyday since.

    Also, had a Radeon 5000 series video card for a year and a half it. Upgraded it to a 6000 series 2-3 months back. Both have been very stable and had very few issues.

    The performance I have experienced from both has been great for my needs. I do too much gaming and seem to have better luck with TF2 than many online with NVIDIA cards, especially when it comes to new TF2 updates, which are all the time.

    On another note, competition is almost always necessary to keep companies trying to make the better products. I am not surprised that sales have fallen though. I would think that a lot of AMD's processor customer base are those that build PCs. Many of those probably were holding off on any upgrades till after Windows 8 released.

    Hang in there AMD!
    guss_14