AMD lays off 500 people worldwide

SAN FRANCISCO Thu Nov 6, 2008 5:09am EST

An AMD 790FX chip is seen in an undated handout photo. REUTERS/AMD/Handout

An AMD 790FX chip is seen in an undated handout photo.

Credit: Reuters/AMD/Handout

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SAN FRANCISCO (Reuters) - Advanced Micro Devices, one of the world's two makers of microprocessors for personal computers, said it had cut 500 people from its staff of 15,500, effective Wednesday, as part of a move to cut costs.

A spokesman declined to give any details about where the cuts had been made.

They are part of major changes the company is undergoing to reduce expenses, including spinning off its manufacturing arm.

The plans pre-date the economic troubles of September and are part of an approach the company has called "asset light."

"We were expecting the company to initiate some cost-cutting. In a move toward 'asset light' they need to become a leaner company and we view this as a positive step," said JoAnne Feeney, an analyst with FTN Midwest.

The company said 3,000 more jobs would be moved early next year to The Foundry Co, the $5.7 billion spin-off of its manufacturing plants in a joint venture with Abu Dhabi.

That venture gives AMD a cash injection and shrink debt to better compete against larger rival Intel Corp.

Advanced Technology Investment Company (ATIC), the Abu Dhabi firm, also committed to investing another $3.6 billion to $6.0 billion over five years to fund the venture's expansion.

The 3,000-person new company will hold AMD's two plants in Dresden, Germany and make all of its central processing units, as well as chips for other companies.

(Reporting by David Lawsky; editing by Carol Bishopric and Ted Kerr)

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