AMD Reinstates Pay Cuts

Advanced Micro Devices (AMD) recently announced that the pay cuts it had initiated in January this year would be reinstated in December. Hourly workers had suffered pay cuts of up to 5%, while executives at higher rungs took bigger cuts of up to 20%.

The company expected the job cuts and rationalization of pay to help it deal with recessionary pressures that were hurting its already unprofitable business.

In March, the company signed a deal with an Abu Dhabi state-sponsored financial institution that brought in some cash, enabled it to operate in a fabless model and improved its chances of achieving profitability in the near term.

CEO Dirk Meyer said that the company’s new product lineup and the strengthening economy were the reasons for the increased confidence. He expressed optimism regarding the company’s achieving profitability by year-end.

Some analysts expect the company to benefit from Hewlett Packard Co.’s (HPQ) decision to cancel some existing programs with chip giant Intel (INTC) Even if it does not make such gains, AMD will undoubtedly benefit from the turnaround in the chip market.

Chipmakers Intel and Texas Instruments (TXN) recently raised their guidance for the third quarter, citing improving business conditions. Semiconductor equipment makers ASML Holding NV (ASML) and KLA-Tencor (KLAC) also raised their forecast. While foundries Taiwan Semiconductor Management Co. (TSM) and United Microelectronics Corp. (UMC) saw signs of recovery, the SIA stated that global chip sales increased 17% in the second quarter, signifying a resurgence in the segment.

Comments

[principle:]

Nice, the company has its stride back, with good things to come. Imagine the power AMD can bring you when on level playing field for manufacturing feature size with Intel. And spend more on R&D while making higher margins from spinning off their foundries and debt.

Sep 20 06:23 PM

[BullnBear:]

The pay cut theme may play out more than people are expecting this year and sadly more than Washington is expecting.

I don’t believe that AMD is going to be alone in this, just one of the first to announce this plan or continuation of an existing plan.

Sep 21 12:11 AM

[amdman:]

This is the most misleading title and description of what really happened that I have ever read. Some Wall Street firms that are short AMD must really be hurting.

Read something that makes sense instead:
AMD Revokes Employee Pay Cuts
blogs.barrons.com/tech...

Sep 21 02:40 PM

[GamerGirl71:]

How about giving AMD kudos where they really deserve? Whether it's off or on again blah blah...how about the comment about workers getting 5% and the management 20% reductions.
Uhh... Am I hearing right?! AMD is actually saying to it's management, "Hey, u guys get the higher cut sorry ;D"
Wow, sounds like a company that plays fair to me. Sounds like we need more honest companies like this around if they can tell the guys in the office they are the ones to take the highest cuts and leave the lil guys alone that are the real backbone of the company.
I use thier products and am a faithful customer no doubt, but I never gave much thought at all of how they run thier business. Now I am damn proud to be a customer of AMD and to hell with Intel!!

Sep 22 12:31 PM