AMD plans to cut 1,100 jobs
Advanced Micro Devices (AMD) will eliminate 1,100 jobs, cut salaries and take a new $622 million (Dh2.28 billion) charge for its acquisition of graphics chip manufacturer ATI, bringing total writeoffs for the deal to $3.17bn.
AMD, which trails Intel Corp in the chip market, said the salary decreases range from 20 per cent for its two top executive to five per cent for lower level employees in North America and voluntary pay cuts in other regions.
The firm, which has been criticised for overpaying for its $5.4bn 2006 purchase of ATI Technologies Inc, warned in December it would have to take an additional charge after taking a $800m impairment charge in its June quarter and more than $1.5bn in writeoffs taken in 2007.
But Charter Equity Research analyst John Dryden said the extent of the writedown was not a shock because it reflected the recent decline in AMD's share price rather than the performance of its graphics chips business.
"In fact graphics, which is 20 per cent of the business, is outperforming microprocessors," said Dryden. "It's taken share from Nvidia Corp in the last couple of quarters. I expect that to extend into the first half of 2009 despite the weak economy."
As part of its cost cuts, it said Chairman Hector Ruiz and CEO Dirk Meyer will temporarily take 20 percent salary cuts, while US and Canadian executives at the level of vice president and higher will take 15 percent cuts.
North American employees who are not eligible for overtime pay will take 10 per cent cuts.
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