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Low sales prompt AMD to cut costs

By Justin Mann

On April 9, 2007, 3:12 PM

AMD isn't too happy about their current sales figures. Not that it is a surprise to anyone, as Intel has been trouncing them ever since the release of Core 2. Their improvements are coming too little too late, and it's showing. It seems sales for chips in 1Q 2007 were down around a third from just a few months back.

As such, the company is planning a "restructuring" to improve efficiency:

AMD said it plans to restructure its business model to "increase operational efficiencies and lower its operating cost structure". AMD will reduce 2007 capital expenditures by approximately $500 million, which the company believes will not materially impact capacity plans for the year. AMD will also significantly reduce ?discretionary expenses? and limit hiring to critical positions. The company will provide more details during its conference call to report first quarter 2007 financial results on April 19.
That most likely means layoffs in a big way. I do hope they can pull themselves out of it, particularly since the Core 2 has no real competition at the moment. It is odd that price cuts come at the same time they announce a reduction in operating expenses,.

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