- Restructuring affects about 500 employees across organization
- Chipmaker continues to lose ground to Intel in PC processors
Advanced Micro Devices Inc. said it will cut about 500 jobs, or 5 percent of its workforce, part of a restructuring meant to streamline its business and reduce costs as the chipmaker struggles to compete with Intel Corp. in personal-computer processors.
Sunnyvale, California-based AMD will record charges of about $42 million for the restructuring plan, which includes outsourcing some information-technology services and application development. The cuts are expected to bring savings of about $2 million and $7 million in the last two quarters of this year, respectively, and savings of about $58 million in 2016, AMD said Thursday in a regulatory filing.
AMD is losing market share to Intel in processors for PCs and servers. It’s trying to expand into custom chips as part of an initiative that has so far failed to bring in enough revenue to make up for the orders it’s losing in a declining PC market. The company had about 9,500 employees at the end of June, according to data compiled by Bloomberg.
AMD had 9,469 employees the last time it reported headcount, said Drew Prairie, a company spokesman. While the cuts will take place across the organization, proportionally fewer engineers will be let go -- an effort to preserve the company’s chip-design capabilities, he said.
The chipmaker had been in talks to sell about a 25 percent stake to private equity firm Silver Lake Management over the summer before negotiations stalled, people with knowledge of the matter said earlier this week. The two sides put the discussions on hold after failing to agree on a price and strategy, said one of the people, who asked not to be identified because the information is private. AMD is also considering other strategic options, another person said.
AMD shares rose 1.2 percent to $1.74 at the close in New York, before the restructuring was announced.