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.

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

About

Zack Whittaker writes for ZDNet, CNET, and CBS News. He is based in New York City.

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