Monday, April 07, 2008

AMD Announces Job Cuts

amd logoAMD announced this afternoon that it would cut 10 percent of its work force, or about 1,680 jobs.

Citing lower-than-expected sales across its business, AMD estimated revenue for the quarter which ended March 29 at about $1.5 billion, well below the average analyst forecast of $1.62 billion.

AMD has been a strong competitor fighting Intel for a share of the CPU market for years. However their newest products have fallen short of consumer expectation leading to a decline in sales. The recent $5.6 billion acquisition of graphics chip maker ATI Technologies Inc., has pushed the companies even lower. AMD recently said is worth about 30 percent less than when it was acquired.

AMD viewed the acquisition as a key way to attack Intel and incorporate better graphics capabilities into its chips. The reviews of the newly released 780g chipset show great promise, however both Intel and Nvidia have taken strangle holds on the market.

Nvidia's recent introductions, the 9600gt , 9800gtx and 9800gx2 have proven to be better, faster and cheaper than most offerings from Ati.

All the while Intel has seated itself as the top dog with several outstanding dual and quad core cpu's. Their 45 nanometer chips are trumping anything AMD has been able to release so far. Lower power consumption and higher performance are hard to beat.

Its not all roses for Intel however. They also issued warnings about the first quarter profits. In early March, Intel cut its gross margin forecast, citing weaker pricing for NAND memory chips used in consumer electronics, such as digital music players and cell phones. Intel is scheduled to report results on April 15.

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