14 DAY TRIAL // The Sunnyvale, California-based chip maker, Advanced Micro Devices, appears to be ending 2008 with a fresh new round of bad news, as the company is expected to lay off more of its employees, according to a recent filing with the Securities and Exchange Commission. The chip maker also announced that it would incur $70 million in restructuring costs in the fourth quarter, due to the new restructuring dollar figure. The company initially announced that it would have to lay off approximately 500 people, but the figure appears to have grown close to 600.
“Of this amount, approximately $34 million is related to severance and costs related to the continuation of certain employee benefits, approximately $13 million is related to contract or program termination costs, approximately $17 million is related to asset impairments and approximately $6 million is related to exit costs for facility site consolidations and closures,” reads the filing.
In the upcoming year, the company is expected to announce even more layoffs, as a result of the spin-off of its manufacturing unit, as well as other business streamlining efforts, according to industry sources. Approximately 1400 to 1500 additional layoffs are expected to be announced in 2009, consequently enabling the company to deal with a total combined headcount of about 14000 by the end of next year.
“Further cost reduction actions will result in additional charges in the first half of fiscal 2009, which the company cannot estimate at this time,” stipulates the same filing.
According to the latest figures in the industry, the company's stock has been recently trading at 18-year lows, giving the company a market capitalization of about $1.2-$1.3 billion, approximately half of the impairment charges AMD has taken for ATI, so far. The company has said that it expects an additional “material” charge, due to the current market conditions that are negatively impacting the ATI products.