(NASDAQ:AMD) has announced that it will lay almost 500 employees off. As the chipmaker struggles with its business worldwide, it has chose to cut 5% of its entire workforce around the globe, in order to cut down on cost amid facing declining demand for its processors used in PCs in the intense worldwide competition.
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As part of the effort, AMD said it also aims to streamline its sales efforts, create regional presidents to oversee sales in Chinese and European markets and outsource application development and tech support. Furthermore, the company said that it would benefit from the restructuring in the coming year, starting with the estimated savings of almost $58 million.
The company said that about $41 million of the total charges will be recorded in the third quarter of the fiscal year 2015.
The company believes that all the activities falling under the plan will finish off by the end of fiscal year 2016 (FY16).
AMD shares rose 1.2 percent to $1.74 at the close in New York, before the restructuring was announced.
Credit Suisse analyst, John W. Pitzer has maintained an Underperform rating, along with the price objective of $1.90 on Advanced Micro Device’s stock. Its down 0.09, from 1.14 in 2015Q1. Advanced Micro Devices has a 52-week low of $1.61 and a 52-week high of $3.46. From 38% in second quarter of 2014 (2Q14), its market share continued to decline to the position in each quarter to 18% in 2Q15. Institutional investors own about 62% of its stock.
Advanced Micro Devices, Inc.is a global semiconductor firm with facilities across the world. The Company operates in two segments: the Computing and Graphics segment, which includes desktop and notebook processors and chipsets, discrete GPUs and professional graphics, as well as the Business, Embedded and Semi-Custom section, including server and embedded processors, thick servers, semi-custom SoC products, engineering services and royalties.
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It has been a while since job cuts have been a regular theme in the industry thanks largely to better economic times but they are resurfacing as a result of vendor responses to changes in the market landscape.
