AMD battles slump in chip market

The bad news continues for Advanced Micro Devices (AMD), the company has announced it is to cut 2,300 jobs and close two of its chipmaking plants as part of cost-cutting measures.

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By  Zoe Moleshead Published  September 26, 2001

The bad news continues for Advanced Micro Devices (AMD), the company has announced it is to cut 2,300 jobs and close two of its chipmaking plants. The move comes just weeks after IBM announced it was to discontinue selling AMD-based PCs in the Middle East region as well as North America and Europe.

AMD will close its Fabs 14 and 15 plants in Texas, axing a 1000 jobs in the process. The remainder of the job cuts are expected to come from Malaysia. The jobs cuts will amount to 15% of AMD’s total workforce.

AMD is, however, predicting the cost-cutting measures will save it $125 million annually.

“These actions will allow us to reduce costs without impairing our new product development activities in pursuit of long-term growth opportunities. We will focus our organisation around our two most promising opportunities – flash memory devices and PC processors,” explained W.J. Sanders III, chairman and CEO, AMD. “We will treat all employees affected by these actions with fairness and respect, consistent with our values and our commitment to our people.”

AMD’s plight is symptomatic of the chip industry as a whole, which has been battling slowing growth and the economic downturn. While some analysts are predicting chip market sales could fall by as much as 34% this year.

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