SAN FRANCISCO — Advanced Micro Devices Inc. plans to cut an additional 900 jobs during the first quarter of 2009 as part of a series of moves designed to reduce the chip maker's workforce by about 9 percent, AMD said Friday (Jan. 16).

AMD (Sunnyvale, Calif.) will shed another 200 jobs through a combination of attrition and the previously announced divestiture of its handheld business, the company said.

AMD had two major rounds of layoffs in 2008. Late last year, AMD reduced its workforce by about 600 employees. Last July, it announced the layoff of 10 percent of its workers.

Other cost control measures announced Friday included temporarily reducing employee base pay and suspending some benefits programs. Executive chairman Hector Ruiz and CEO Dirk Meyer will be taking temporary reductions in base salary totaling 20 percent, AMD said.

AMD also said it will cut executive pay in the U.S. and Canada by 15 percent. All other North American employees ineligible for overtime will face a 10 percent salary reduction, the company added.

Outside North America, AMD said it would implement "voluntary pay reduction measures consistent with local policies and regulations."

In a statement, AMD said it had determined to take "difficult, but prudent" actions to reduce costs as the result of the continuing economic downturn.

A spokesperson for AMD said the job cuts would occur across all regions AMD operates in and span all levels of employees.

On Thursday, AMD rival Intel Corp. said its fourth quarter 2008 revenue fell to $8.2 billion, down $10.7 billion from the same period of 2007. But the shortfall was widely expected after Intel cut its guidance for the quarter twice. Despite rumors, Intel has yet to announce any large scale job cuts.

AMD is scheduled to report fourth quarter earnings next week (Jan. 22).

AMD is a distant second to Intel in the microprocessor market. The company made waves a couple of years ago by biting into the No. 1 chip vendor's market share, but has since lost surrendered the gains. AMD said in November it would not make chips for mobile internet devices and smart phones that would compete with Intel's popular Atom chip.

In a landmark move last October, AMD announced it would split into two parts, spinning off its fabs into a separate company backed by the government of Abu Dhabi.

Other large U.S. chip makers are also expected to announced job cuts in the coming days.