LONDON – Fabless processor firm Advanced Micro Devices Inc. (Sunnyvale, Calif.) plans to cut up 2,340 jobs or 20 percent of its workforce, according to a Bloomberg report that referenced an unnamed source. Other reports put the job cutting at between 10 and 30 percent of AMD's 11,700 staff.
The cuts are likely to be announced as early as next week, the report said, and are necessary because of weakness in the personal computer market, the main place where AMD processors are used.
AMD announced on Thursday (Oct. 11) that its third quarter sales were lower than previously expected due to weaker demand across all product lines caused by macroeconomic difficulties. It said sales were expected to decline 10 percent sequentially in 3Q12 to $1.27 billion. This is considerably lower than the previous estimate of $1.38 billion and $1.4 billion, which itself would have been sequentially down.
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Two recent market research firms – Gartner and IDC – recently stated that third quarter 2012 PC unit shipments declined by more than 8 percent compared with 3Q11. One reason could be the imminent release of the Windows 8 operating system by Microsoft, expected on October 26.
Purchasers may be putting off PC buys waiting to get a Windows 8 computer. However, Windows 8 will be the first operating system that will run on two processor architectures, x86 as it has done before and ARM. So the advent of the new operating system may provide less of a boost for x86 processor vendors Intel and AMD than OS launches have done in the past.
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