Chipmaker AMD to Cut 10 Percent of Workforce

In what appears to be the first big job for new CEO Rory Read, chipmaker Advanced Micro Devices just announced that it’s going to cut its workforce by 10 percent in order to get costs under control.

The job cuts will hit the company globally and will be completed by the end of the first quarter of 2012, the company said in a statement. The company says the move will reduce operating expenses by $118 million in 2012 and by $10 million in the fourth quarter of 2011.

The cuts will amount to about 1,400 of AMD’s 12,000-strong workforce. What you’ll read elsewhere is that AMD is suffering from a worldwide slowdown in PCs, caused in large part by the growth of Apple’s iPad business and to a lesser extent other tablets. But it’s a little more complicated than that when you consider that AMD’s share of the market actually grew slightly in the second quarter, according to the latest numbers I have from Mercury Research, which tracks the market share between the two chipmakers. As of August, AMD was running a 19.4 percent share of the PC and server business, up from 18.2 percent in the first quarter, while Intel’s share dropped slightly from 81 percent in the first quarter to 79.9 percent in the second. Those fractions of a percentage point actually matter to both companies.

The bigger problem is that AMD is nowhere in tablets or smart phones and that was one of the reasons that Read was brought in to replace Dirk Meyer, who surprised everyone by resigning after a fight with his board of directors in January.

In the meantime, expect AMD to make a big fuss about server chips in the coming weeks.

AMD’s statement is below.