AMD announces layoffs, drops revenue forecast

Advanced Micro Devices on Monday said it plans to lay off 10 percent of its work force by the third quarter of 2008 in an effort to cut costs.

As a result of the layoffs, AMD expects to take restructuring charge of an undetermined amount in the second quarter of 2008.

The company also lowered its revenue expectations for the first quarter of 2008 is "due to lower than expected sales across all business segments," it said in a statement. AMD is predicting quarterly sales of US$1.5 billion, a 22 percent increase compared to the first quarter of 2007.

Analysts polled by Thomson Financial originally predicted net revenue of US$1.61 billion.

AMD has been struggling since acquiring graphics vendor ATI in 2006, reporting five consecutive quarterly losses due mostly to charges connected with the acquisition. AMD reported a net loss of US$1.772 billion in the fourth quarter of 2007, which was higher than revenue of US$1.770 billion. The net loss included charges of US$1.675 billion mostly related to AMD's acquisition of ATI in 2006.

During a conference call announcing the fourth quarter results, AMD Chief Financial Officer Mario Rivet said the company hopes to return to profitability by the second quarter of 2008.

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