Advanced Micro Devices (NYSE: AMD) is laying off 10% of its workforce in an effort to cut costs. The world’s second largest chipmaker will also terminate some contractual employees, resulting in about 1,400 total cuts. The move follows 1,100 job cuts last year. AMD will also end some contracts, resulting in roughly 200 additional layoffs. The company says the reduction will affect all job functions and all locations and should be complete by the end of the first quarter of 2012. AMD currently employs about 2,700 people here in Austin.
AMD says the layoffs should save it about $200 million, which it will use to invest in emerging markets, cloud computing, and especially in lower power chips, which are increasingly popular for tablet computers and other battery-powered devices. AMD has so far stayed out of the market for smartphone chips, focusing on servers, notebooks and tablets. The company says it leads the market in discrete graphics processors for netbooks.
Right now most of AMD’s chip sales are into the personal computer market. This market has been sluggish, and AMD’s board has known for some time that the company needs to focus more on chips for mobile devices. Early this year the board replaced former CEO Dirk Meyers with Rory Read, hoping Read would help refocus AMD on mobile.
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