AMD to Restructure and Cut 5% of Workforce

United States chipmaker AMD, faced with a decline in its activity, will reduce its workforce by 5% worldwide in order to save money, the company announced Thursday.

The restructuring plan will cost AMD approximately $41 million in the third quarter of fiscal year 2015 – $31 million of which will be related to severance and benefit costs, and $1 million to facilities related consolidation charges.

The plan, which is focused on the company’s ongoing efforts to simplify its business and align resources around its priorities of building great products and deepening customer relationships, includes organizational actions such as outsourcing certain IT services and application development. It is now betting the farm on its Zen chip range, which should be out next year.

The job cuts will take place across AMD’s global operations, including Austin, Texas, and company headquarters in Sunnyvale, California, Prairie said.

AMD had about 9,700 employees at the end of a year ago, according to its latest annual filing from February.

AMD, which sells central processing units and graphics chips used in personal computers, in July lowered its revenue estimate for the second quarter, citing weaker-than-expected demand for PCs.

The company has been shifting to gaming consoles and low-power servers, but it really has not moved fast enough or come up with the sort of “wow” technology which is needed to see off Intel.