On Thursday, United States chipmaker Advanced Micro Devices Inc (AMD.N) said it was struggling, considering the 7% cut on its workforce. It also forecasted revenue for the recent quarter lower than expected, also sending the company’s shares lower.
AMD’s workforce cut was the third major decision since 2011 a week after Rory Read, Chief Executive Officer was replaced by Lisa Su, Chief Operating Officer. That was an unexpected decision, which sparked some speculations regarding fresh troubles in the company, thus, hurting the chipmaker’s stock.
Kevin Cassidy, an analyst at Stifel Nicolaus said has been cleaning the house and setting it up to give way to Lisa Su. This was his prediction following the workforce reduction. However, AMD stated that the decision was due on December in order to save $9 million during the fourth quarter, while $85 million by next year.
The company had a total of 10,149 employees by the end of the September quarter.
The company has also been expanding into new marketplaces like low-power servers and game consoles, although there was slower progress than expected by Wall Street.
Through a statement, AMD reported its third-quarter revenue, while forecasting its current-quarter revenue. Both reports missed expectations as its shares went down by 5% in extended trading.
The company also indicated that its revenue fell by 2% to $1.43 billion during the third quarter, which also missed Wall Street expectations. A 13% fall on its fourth-quarter revenue has been indicated, which was roughly $1.244 billion.
The average estimate of analysts was expected at $1.47 billion during the third quarter, while $1.48 billion during the fourth. This was based on Thomson Reuter’s analysts’ poll.
Net profit was reported at $17 million during the third quarter, which was 2 cents per share, compared to the $48 million net gain or 6 cents per share last year.
The company’s Computing and Graphics division, including processors for computers has expected revenue to fall by 16% year over year. AMD shares declined by 5% in extended trading.