(By Balachander) Advanced Micro Devices Inc. (NYSE:AMD) may cut upto 20 percent of its jobs, days after the chipmaker reduced its revenue forecast for the third quarter, citing weaker-than-expected demand across all product lines caused by the challenging macroeconomic environment.
The company now expects revenue for the quarter ended Sept. 29 to decline roughly 10 percent from the prior quarter, versus prior projections of a revenue drop to 1 percent, plus or minus 3 percent.
AMD currently expects gross margin to contract to 31 percent from around 44 percent guided earlier due to an inventory write-down of about $100 million because of lower anticipated future demand for certain products.
The Sunnyvale, California-based company has lost its market share to Intel (INTC) and Nvidia (NVDA) because of execution setbacks amid drop in demand for personal computers that depend on its chips.
The company expects operating expenses to decrease roughly 7 percent from the prior quarter.
For the second quarter, AMD earned 6 cents a share on revenue of $1.41 billion on a non-GAAP basis. The company reported non-GAAP gross margin of 46 percent.
"According to sources familiar with the company's plans, (they asked not to be identified), AMD will announce next week that it will cut between 20 percent and 30 percent of its employees," All Things D reported on Friday. The job cuts are expected to be announced as early as next week.
As of February, AMD employed roughly 11,700 people worldwide.
In November 2011, AMD terminated 10 percent of jobs in a move to cut costs.
The stock closed at $2.74 on Friday. Over the past year, shares have been trading between $2.74 and $8.35.