AMD cutting jobs, trims sales outlook

AMD announes that it will lay off 10% of its workforce.

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NEW YORK (CNNMoney.com) -- Advanced Micro Devices, Inc., a global semiconductor company, announced Monday that it will lay off 10% of its workforce, or roughly 1,680 employees.

The company also trimmed its first quarter-sales forecast, blaming "lower- than-expected sales across all business segments."

AMD's revised revenue estimate for the first quarter that ended March 29, 2008 is now $1.5 billion. That's about $120 million short of Wall Street estimates and down 15% from the fourth quarter. However, it is still 22% above the comparable period a year-earlier.

AMD (AMD, Fortune 500) has been losing ground to rival chipmaker Intel Corp (INTC, Fortune 500)., which controls 80% of market share, in terms of units, leaving AMD with the remaining 20%. Research analyst David Wu of Global Crown Capital said that AMD has even less than 20% of market share in terms of dollars.

Wu said, "they should have cut a long time ago." Since the start of 2007, shares of AMD have lost more than 67%, while rival Intel's stock has gained 6.9%.

"AMD had a couple years where they were beating Intel," said Wu. "Now the role is reversed." AMD is trying to catch up. The news came as little surprise to Wu, who said speculation had been swirling for more than a month. "Better late than never," Wu said.

AMD closed on Monday at $6.33 a share, but the stock was down as much as 7.6% in after hours trading. Intel closed on Monday at $21.75, but the stock slipped 2.4% in after hours trading.

AMD will report first quarter 2008 results after market close on Thursday, April 17, 2008.