Advanced Micro Devices Inc unveiled a plan on Thursday to save about $200 million of operating costs in 2012 by slashing 10 percent of its global workforce and streamlining internal business processes.
The layoffs mark the first major move by Chief Executive Rory Read, who came onboard in August to try to galvanize a microprocessor maker that has bled market share to larger rival Intel Corp, while missing out on the mobile device boom.
"It's not too surprising given the operating background of the new CEO and this is exactly what you'd bring an outsider in to do, but their problems go far deeper right now," said Alex Gauna, an analyst at JMP Securities.
The layoffs should be completed in 2012's first quarter, AMD said in a statement. Savings generated could help bankroll research and expansion into areas such as low-power chips, emerging markets and cloud computing next year.
In late September AMD, a distant second to Intel in selling microprocessors that are the brains of PCs, warned of manufacturing problems manufacturing it new 32 nanometer Llano chips as well as older 45 nanometer chips.
Last week Read said AMD and its manufacturing partner GlobalFoundries were making progress but that more work was needed to improve AMD's execution.
Like Intel, AMD has failed to gain traction in increasingly popular mobile gadgets like Google Inc's Android smartphones and Apple Inc's iPad, which some people are buying instead of laptops.
Read, who was a top executive with PC maker Lenovo Group Ltd, replaced Dirk Meyer, who left in January partly due to differences with the board of directors over the company's mobile strategy.
Shares of AMD slipped 3 cents to $5.70 in after-hours trade.
(Reporting by Edwin Chan; Editing by Tim Dobbyn, Gary Hill)