AMD to lay off 2,000 workers by Q2 of 2003

Two thousand workers at chip manufacturer Advanced Micro Devices Inc. (AMD) will lose their jobs by the second quarter of next year, the company announced Thursday in a release.

Last week, AMD said it would cut operating expenses by US$350 million in an attempt to break even by the end of 2003. As part of those reductions, it said it would be forced to eliminate some positions.

Half of the 2,000 employees affected by the announcement were given notice Thursday. The cuts represent approximately 15 percent of AMD's global workforce, and will affect workers in Europe, Asia, as well as in the U.S., AMD said.

About one-third of the positions will be cut at the company's Sunnyvale, California, headquarters, one-third at the Austin, Texas, offices, and the remainder spread out across operations in Asia and Europe, home to the company's primary fabrication plant in Dresden, Germany.

The cuts will comes across all groups and all levels as well, an AMD spokesman said. Vice presidents and directors will not be spared, although the company would not release specific names.

The remaining cuts will be spread out over the time between now and the second quarter of 2003, AMD said. The company will gradually make the remaining cuts, and while it doesn't expect to make one large announcement of the remaining cuts, it is reserving the option, said the spokesman.

AMD has had a difficult year, enduring a third-quarter inventory correction of its Athlon XP and Athlon MP processors, and delays in its long-awaited 64-bit Hammer technology, now scheduled for release in the first half of 2003. Despite the problems, it predicted a 20 percent increase in fourth-quarter revenue.

Despite the job cuts, AMD remains on its current road map, the spokesman said.

"We did this with an eye to being able to compete in the future. This action is ... to restore our financial credibility as well as to position us to succeed in the future," he said.

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