AMD reorganizes production: Additional cost incur
Without revealing any details AMD announced in December 2008 that at the beginning of 2009 additional cost would incur for the reorganization.
- 23 million US dollar for severance and costs related to the continuation of certain employee benefits
- 13 million US dollar for contract or program termination costs
- 7 million US dollar for asset impairments
- 7 million US dollar for facility site consolidations and closures
Already at the end of 2008 AMD cut jobs and reduced the workforce by about 600 employees. In 2009 AMD plans to cut more jobs - about 900 in number. But this is only one part of the cost reduction process - the aim is to reduce the staff, especially in the production department, by about 9 %. The reason for the restructuring is AMD's negative balance sheets. At the end of 2008 AMD reported a net loss of 127 million US dollar.
According to EETimes.com AMD announced additional cost reduction actions during the fiscal year 2009 in order to make the production business more efficient. AMD intents a "fabless design” which means that the chip production is done by outside companies only. So AMD does not have to deal with further fixed cost for the factories and can therefore reduce its production cost enormously.
More interesting articles about AMD and production:
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• Globalfoundries wants to start 32 nm production in 2009
• Intel wants to recall license agreement with AMD
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