Advanced Micro Devices (AMD) is set to lay off 15 percent of its workforce and close down some unspecified sites globally to be able to cope up with profit loss reflected in its third quarter report released just recently. The downsizing move will reportedly happen in the final quarter of this year where the company seeks to save $20 million in operational expenses. Typical of any company trying to let go some of its employees, the chip-maker’s president and CEO assures everyone that this effort is necessary to bring the company back to “profitable growth.”
“Our restructuring efforts are decisive actions that position AMD to compete more effectively and improve our financial results. Reducing our workforce is a difficult, but necessary, step to take advantage of the eventual market recovery and capitalize on growth opportunities for our products outside of the traditional PC market,” Read said.
Majority of the companies have seen a losing third quarter. The most common move many of these companies make to compensate for loses is to lay off some of their employees simply because, there would be an immediate cut to their operational expenses. Only very few resort to the production of better products or offer promotional bundles. In AMD’s case, this is the second consecutive year where it lays off a considerably huge percentage of its workforce.
Between November of 2011 and February of 2012, AMD already had its first round of firing its hundreds of its employees. The company approximately sent home 10 percent of its workforce, or around 1400 people, that time. Later this year, at least 1500 employees would be without a job after the holidays. Needless to say, the company is developing a habit. This round of layoffs wouldn’t even bring profit for the company; it is just trying to break even the possible losses it might incur in 2013. If things continue to look bad for AMD, more employees might be fired by the end of next year.
While it hasn’t been specified where the cuts would be made, a report from PC Mag suggests that the downsizing would start from sales department, platform engineering and mobile and embedded chip development team. If this is accurate information, it is obvious the chip-maker cannot cope up with the competition in the tablet market and that there is a significant drop in the PC industry.
“The PC industry is going through a period of very significant change that is impacting both the ecosystem and AMD. It is clear that the trends we knew would re-shape the industry are happening at a much faster pace than we anticipated,” Read said.
For now, AMD hasn’t announced better plans for the future but it is rumored it might resort to the production of chips for smartphones and tablets. But then again, it has to wrestle with key industry players like Qualcomm.