AMD will also reduce and restructure other manufacturing activities as well as administrative support associated with these facilities.
These changes will result in the reduction of approximately 2,300 positions, or approximately 15 percent of its worldwide workforce, by the end of the second quarter of 2002. Approximately 1,000 of these positions are associated with closing the fabs in Austin. The balance of the reductions will result from realigning and restructuring back-end activities in Penang, Malaysia. The company will provide severance packages and outplacement services to affected employees.
These actions will allow us to reduce costs without impairing our new product development activities in pursuit of long-term growth opportunities. We will focus our organization around our two most promising opportunities flash memory devices and PC processors, said W.J. Sanders III, chairman and chief executive officer. We will treat all employees affected by these actions with fairness and respect, consistent with our values and our commitment to our people.
Fabs 14 and 15 have a long history at AMD and are the company’s oldest fabs. The two facilities were originally constructed in 1984 and 1985. AMD will take a one-time charge between $80 million and $110 million covering these restructuring activities and other special charges in the current quarter. When fully implemented, these actions are expected to result in an overall annual cost reduction of approximately $125 million.
SOURCE: COMPANY PRESS RELEASE
