AMD retrenchment (from Computer World)
Gotta start packing my stuffs... Losing job soon, anyone have lobang??
AMD raises layoff cost estimate after axing more jobs than planned
Struggling chip maker says it is laying off 600 workers, up from an earlier plan of 500
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December 30, 2008 (IDG News Service) Advanced Micro Devices Inc. has put the upfront cost of the layoffs and other cutback moves it announced earlier this quarter at about $70 million, a higher-than-expected tab that resulted from an increase in the number of jobs that the chip maker is cutting.
In addition, AMD reiterated that it expects to take further cost-cutting actions during the first half of next year, which will lead to additional charges against earnings. And the struggling company said it can't yet put a value on a planned goodwill impairment charge related to its 2006 acquisition of graphics chip maker ATI Technologies Inc.
The announcements came in a filing that AMD submitted on Monday to the U.S. Securities and Exchange Commission. That filing addressed the company's expected financial results for the fiscal quarter ended Dec. 27.
As part of its plan to cut costs by spinning off its chip manufacturing operations, AMD said in early November that it expected to lay off 500 employees in the fourth quarter, with upfront costs totaling $50 million.
However, the company, which lowered its Q4 revenue forecast earlier this month, said in the SEC filing that it had increased the number of workers being laid off to about 600. That also increased the expected charge that AMD plans to take as part of its fourth-quarter results.
About $34 million of the $70 million total will be directly related to severance costs and the continuation of employee benefits, according to AMD. Other costs will include $13 million for terminating contracts and programs, $17 million to account for asset impairments and $6 million for closing and consolidating facilities.
AMD also said in the filing that it plans to take a charge against its Q4 results to account for an impairment of the goodwill value recorded after it bought ATI. Goodwill, the part of a company's value not related to tangible assets such as buildings and equipment or intangible assets such as patents, can vary with market conditions.
AMD said that it expects the ATI impairment charge to be "material" but it isn't sure exactly how large the writedown will be. The company plans to report its fourth-quarter results on Jan. 22.
Finally, AMD noted that it will mark down by $20 million the value of its investment in flash memory manufacturer Spansion Inc. Now an independent company, Spansion began as a joint venture between AMD and Fujitsu Ltd. As of March, AMD still held 9% of Spansion's stock — the price of which dropped in early trading today to 19 cents per share. In February, the share price topped $4.
