AMD Discharges 15% of its Labour Force as Profits Slide in Third Quarter

By: Jeff Stewart  |   October 23rd, 2012   |   Business, News

Advanced Micro Devices (AMD), a PC chip maker that once used to stand among the most profitable companies in the world, has posted a net loss of $157-million in Q3 of this fiscal year. A year ago, the Sunnyvale, California based company was earning decent profits, having posted profits of $97 million at the time, thus making the recent fall even more compelling. AMD began losing money quite rapidly, and after bearing net losses in the last three months the  firm decided to lay off 15 % of their labour force in an effort to lower operating costs.

 

This is not the first time that AMD has made such an announcement, as earlier this year the company had already released a cohort for their work force. The company stated that the reason behind their action is that the world’s economy has not yet fully recovered from the catastrophic recession which struck a few years back. Most importantly for the future of the company, more consumers have started buying tablets instead of PCs, putting AMD at risk of losing much more future business.

 

Due to the final reason in particular, AMD’s revenue took a severe hit and eventually their quarterly report depicted triple digit millions in net losses. This sad tale does not just end there however, as AMD believes that their revenues will fall further in the last three months of 2012.

 

To tackle this situation it seems that AMD currently has no obvious plans by which they could shift gears and get back into action again. In the short term, through this restructuring that also includes consolidated various assets AMD will save about $190 million. However, in the long term this restructuring policy may not bear much fruit for this PC chip maker company unless they find other sources of revenue.

 

Source: The Globe and Mail