Advanced Micro Devices (AMD) Announces Restructuring Plan; Will Cut ~5% of Workforce
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Advanced Micro Devices (NASDAQ: AMD) disclosed the following on Thursday:
On September 26, 2015, Advanced Micro Devices, Inc. (the “Company”) adopted a restructuring plan (the “Plan”). The Plan is focused on the Company's ongoing efforts to simplify its business and align resources around its priorities of building great products and deepening customer relationships.
The Plan provides for a workforce reduction of approximately 5% of the Company's global workforce. The Plan includes organizational actions such as outsourcing certain IT services and application development. The Plan also anticipates a charge for the consolidation of certain real estate facilities. The Company currently expects to record restructuring and asset impairment charges in the aggregate of approximately $42 million resulting from the Plan. The Company expects to record a majority of the restructuring charge in the amount of approximately $41 million in the third quarter of fiscal year 2015, of which approximately $31 million is related to severance and benefit costs, approximately $1 million to facilities related consolidation charges and approximately $9 million of intangible asset related charges associated with the impairment of certain software licenses that have ongoing payment obligations. The Company expects the Plan will likely result in total cash payments of approximately $26 million and $15 million in the fiscal years 2015 and 2016, respectively.
The savings from the Plan are anticipated to be approximately $2 million and $7 million in the third and fourth quarters of fiscal year 2015, respectively. The Company anticipates savings of approximately $58 million in fiscal year 2016. The actions associated with the Plan are expected to be substantially completed by the end of fiscal year 2016.
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