AMD cuts 215 jobs in Austin, 420 overall

Advanced Micro Devices Inc. has cut 215 jobs in Austin as part of a larger cost-cutting effort.

The Sunnyvale, Calif.-based chipmaker is reducing its workforce overall by 10 percent. Today's cuts affected 420 people companywide.

AMD spokesman Travis Bullard says the cuts will go on through the end of the third quarter.

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Austin is AMD's largest nonmanufacturing site, employing about 2,500 people after today's layoffs, Bullard says.

Analysts say AMD (NYSE: AMD) has fallen behind in competition with Intel Corp. (Nasdaq: INTC). In the past year, the stock price hit a high of $16.19 per share but fell to around $6 per share Thursday.

AMD leaders have tried to turn the tide with a recent announcement to slice 10 percent of its 16,420-member workforce.

In Austin, the company says it has a $331 million annual payroll and makes $110.8 million in local purchases annually. AMD pays $22.7 million for utilities in Austin and pays $52.6 million in city, county and school taxes.

The company also recently lowered first-quarter earnings expectations to $15 billion, a 22 percent increase compared with the first quarter of 2007 and a 15 percent decrease compared with the fourth quarter of 2007.

The decrease is due to lower-than-expected sales across all business segments, AMD says. The company previously anticipated first-quarter revenue to decline in line with seasonality. Earnings are scheduled to be released after the markets close Thursday.

Compounding problems, Chief Technology Officer Phil Hester resigned last week.

Concern over the company's direction has not deterred a planned $3.2 billion chip factory near Albany, N.Y. AMD has until July 2009 to commit to the project and will receive $1.2 billion in state incentives.

AMD officials have said this year's job cuts will not impact the project, which should employ about 1,465 people.