AMD cutting 1,100 jobs and salaries as share price plummets

Jan 19, 2009
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AMD cutting 1,100 jobs and salaries as share price plummets

After last week's round of job losses and cost savings, this week kicks off with the news that AMD will cut 1,100 positions, begin a scheme of mandatory and voluntary pay reductions, and absorb a $622m charge from the ATI acquisition.  The biggest salary reductions will be seen by Chairman Hector Ruiz and Chief Executive Dirk Meyer, whose pay will be temporarily cut by 20-percent, but North American workers across the board will suffer as their pay is reduced by at least 5-percent, and AMD suspend matching company contributions to 401(k) employee retirement plans.

Any North American employee not eligible for overtime pay will see their salary cut by 10-percent; their counterparts eligible for overtime will see a 5-percent cut.  Meanwhile US and Canadian executives who are vice president or higher will take 15 percent cuts.  Employees outside of North America will be invited to take voluntary pay cuts.  AMD has not revealed how much it hopes to save with these measures.

In addition to job losses and pay cuts, AMD are letting loose their handheld division.  While many have blamed the acquisition of ATI - which has cost AMD $3.17bn in total - for the company's precarious financial situation, analysts suggest that falling chip demand and a share price that has dropped by 70-percent since January 2008 are more to blame.


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