Processors Toolkit

AMD faces $50m bill for restructuring

Colin Barker ZDNet.co.uk

Published: 03 Apr 2009 16:43 BST

AMD expects to spend $50m in the first quarter on restructuring its business, the chipmaker said in a regulatory filing on Thursday.

Of that $50m (£30m) in estimated restructuring charges, about $23m will go to severance, expenses and costs related to employee benefits, the Californian company said in a statement filed with the Securities and Exchange Commission. Another $13m or so will be spent on contract or programme termination. AMD expects asset impairment expenses to total $7m, and the cost of closing or consolidating facilities to cost $7m.

The moves are part of a business restructuring plan adopted by AMD in December. In its SEC filing, the company said it anticipated more expenses related to its cost-cutting programme in 2009.

In January, AMD announced that it was going to cut its workforce by nine percent — around 1,000 people. It also said it would introduce temporary salary cuts for some of its most senior executives.

AMD is currently having a tough time in its battle to remain competitive with the microprocessor market leader, Intel. According to research company iSuppli, the chipmaker saw its market share fall to 10 percent in the fourth quarter of 2008, from 14.1 percent a year earlier.

AMD's rival Intel, on the back of growing sales of its Atom processor for netbooks, saw market share rise to 81.8 percent in the same quarter, from 78.4 percent a year earlier.