AMD To Cut 10% Of Workforce

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On a percentage basis, this number is still below what Intel announced to cut as part of its massive restructuring that began in 2006. Including sold departments, Intel so far has eliminated more than 16,000 people from its payroll (which is, by the way, also close to our initial prediction and more than 50% above Intel’s original guidance). According to its annual report, Intel employed about 86,300 people at the end of December 2007, down from about 102,500 18 months earlier.

AMD also announced that it expects Q1 2008 revenue to be about $1.5 billion, up 22% from Q1 2007, but down 15% from Q4 2007. A decline is to be expected because of the seasonal pattern, but 15% is probably much more than most financial analysts would have expected. AMD said that the steep decline is due to "lower than expected sales across all business segments." A loss for the quarter now appears to be all but certain and the question will be how high this loss will be. Based on its 2007 cost structure and the product and financial information provided by the company last year, we estimated in October 2007 that AMD would have to post sales of about $2 billion per quarter to deliver a profit.