Struggling chip maker Advanced Micro Devices Inc said on Wednesday it was cutting 500 workers, or 3 percent of its global staff, to help the company return to profitability.
The cuts are AMD’s second big round of layoffs this year and come amid a huge restructuring. So far this year, AMD had already laid off 1,600 workers before the latest announcement, replaced its chief executive and revealed plans to spin off its factories — which represent a huge expense for chip makers — in a bid to save money.
AMD, the world’s No. 2 maker of computer microprocessors, had deep financial problems even before the economy soured, losing US$5.6 billion over the past eight quarters, and Wednesday’s announcement says more about the company’s anxiousness to improve its balance sheet than the effect of the economy on the chip industry as a whole.
AMD said on Wednesday it had already notified all US-based employees who were being laid off in the latest round of cuts. The latest cuts come after AMD cut 1,600 workers earlier this year.
The job cuts announced on Wednesday will affect all AMD departments worldwide except for the company’s manufacturing operations, which have roughly 3,000 employees and are being spun off into a separate company, spokesman Michael Silverman said.
Meanwhile, Goldman Sachs Group Inc has begun notifying about 3,200 employees globally that they have lost their jobs, as the world’s biggest investment bank slashes expenses to ride out the financial crisis, a person familiar with the situation said on Wednesday.
The job cuts, which were first reported last month, are a reflection of the ongoing downturn in the credit and lending markets that triggered massive losses for banks around the world. Goldman Sachs had been considered the strongest investment bank on Wall Street, and earlier this year had expected its payrolls to expand.
Positions will be cut across Goldman’s offices globally and among various business lines, and will bring the company’s staffing to 2006 and 2007 levels, the person said. He spoke on condition of anonymity because the company hasn’t publicly disclosed details of the plan.
According to CapitalIQ, Goldman has more than 37,000 employees across its operations.
There also have been reports that Goldman’s army of bankers might see their bonuses cut in half this year.
Difficulties at the firm demonstrate that even the industry’s most powerful player is not immune to fallout from the unprecedented financial turmoil.
On Monday, Merrill Lynch analyst Guy Moszkowski predicted that Goldman would report a loss for the fourth quarter — its first since going public in 1999.
The stock market’s plunge has created a brutal atmosphere for some of Goldman’s once high-flying businesses, such as private equity and proprietary trading.
During its fiscal third quarter, which ended on Aug. 31, the company’s profit fell 71 percent, but that performance was still better than many of its competitors, which have reported quarterly losses throughout much of the year.
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