Advanced Micro Devices, Inc. (AMD) will cut approximately 5 percent of its total global workforce as part of its restructuring plan, according to a regulatory filing by the company.
The company has adopted a restructuring plan that aims to simply the business and align resources around its priorities of building great products and deepening customer relationships.
AMD said in the filing that as a result of the plan, they expect to incur restructuring and impairment charges in the aggregate of approximately $42 million.
The company said that about $41 million of the total charges will be recorded in the third quarter of the fiscal year 2015.
AMD also mentioned that approximately $31 million of the total charges is related to severance and benefits cost, and about $1 million is for facilities-related consolidation charges.
Approximately $9 million is for assets-related charges that are associated with the impairment of certain software licenses that have ongoing payment obligations.
AMD stated in the filing that they will also be outsourcing certain IT services and application development.
This is part of the organizational actions that the company is doing in connection with the restructuring plan.
AMD is expecting savings of about $2 million and $7 million in the third and fourth quarter of fiscal 2015, respectively, as a result of the restructuring plan, according to the regulatory filing.
The company expects to save approximately $58 million in the fiscal year 2016 and expects to complete its restructuring plan by the end of the same fiscal year.
Reuters reported that AMD, who is known for selling central processing units and graphics chips for personal computers, has lowered its revenue estimate in July for the second quarter.
The company says that it is due to weaker-than-expected demand for personal computers
Reuters also adds that AMD is trying to get revenue from other sources as the company is shifting to gaming consoles and low-powered servers.
But the company's progress has been hampered by intense competition from Intel Corp. and other newer companies, resulting in developments that came below the expectations of Wall Street.
Reuters added that after-hours trading has shown that AMD shares were flat at $1.74.
