Reports: AMD Layoffs Could Lop Off 3,000 Jobs

Chip maker AMD (NYSE: AMD) is prepping to layoff as much as 30 percent of its workforce, amounting to as many as 3,000 jobs, according to reports — a move that comes hard on the heels of an expected 10 percent Q3 2012 revenue slide, eroding margins and weak demand.

The cuts, also detailed here, could impact workers in engineering and sales, units that skirted prior workforce reductions including the 10 percent of employees worldwide the vendor laid off a year ago November. This time, however, the job eliminations may force the vendor to pare back some product lines. In addition, the reports said, AMD will announce the layoffs sometime this week, perhaps at the same time as the company announces its quarterly results Oct. 18.

Last week AMD disclosed that it anticipated a Q3 2012 revenue shortfall of 10 percent sequentially, far greater than the 1 percent dip it forecasted, blaming weak demand across all of its product lines. The company also said its Q3 gross margins, expected to come in at 44 percent, more likely would end up about 31 percent. On the plus side, AMD anticipates operating expenses to decline about 7 percent owing to tighter cost controls.

Chief executive Rory Read, on the job a little more than a year, is said to have hired management consulting heavyweight McKinsey to handle the cuts as part of a larger strategy AMD execs are crafting to dig out. Whatever new plans the chip maker commits to blueprints will have to include adjustments for the continued turmoil in AMD’s executive quarters. Last month, chief financial officer Thomas Seifert was the latest to leave — becoming by one account the 26th departure from the vendor’s senior ranks in Read’s short tenure — and Chris Cloran, AMD PC business vice president, is also said to have walked.

AMD last week made a foray into the tablet market with its new dual core Z-60 chip, code-named Hondo, which will become available Oct. 26 to coincide with Microsoft’s (NASDAQ: MSFT) Windows 8 debut. AMD-based tablets will follow soon thereafter, officials said.