AMD to Slash 10% of Staff as Sales Outlook Declines
Advanced Micro Devicessaid Monday it will cut 10 percent of its work force and gave a first-quarter revenue estimate below Wall Street expectations, sending its shares down 5 percent.
Shares of the company were trading at $6.22 in extended trading after falling as low as $6.00, down from their New York Stock Exchange close of $6.34.
Based on AMD's work force of 16,800, the cuts at the second-largest maker of computer processors would amount to about 1,680 jobs, spokesman Drew Prairie said.
Citing lower-than-expected sales across its business, AMD estimated revenue for the quarter ended March 29 at about $1.5 billion, well below the average analyst estimate of $1.62 billion, according to Reuters Estimates.
AMD's estimate would be a 22 percent rise from the year-ago period, but a 15 percent drop from the fourth quarter of 2007.
As a result of the job cuts, planned by the end of the third quarter, AMD expects to record a restructuring charge in the second quarter, the size of which is being finalized.
"We have a cost structure that we need to reduce due to lower revenue expectations, which are occurring in uncertain market conditions.'' said Prairie, who declined to be more specific about the reasons for the revenue shortfall.
AMD will report first-quarter results on April 17.
Shares of rival Intel edged lower to $21.55 from their Nasdaq close of $21.75.