A SEC filing by AMD unveils the company reduced its workforce by approximately 600 employees - which is 100 more than expected. The layoffs will cost the company about $70 million. Furthermore, the chip maker also unveils it expects another "material" impairment charge related to the $5.4 billion acquisition of ATI in 2006 and a $20 million impairment charge related to its investment in Spansion.
AMD’s stock has been trading at 18-year lows recently, giving the company a market capitalization of about $1.2 - $1.3 billion, which is about half of the ATI impairment charges AMD has taken so far ($1.6 billion in Q4 2007 and $880 million in Q2 2008; ATI was acquired by AMD for $5.4 billion in 2006.) AMD said it will take yet another “material” charge, because current market conditions are expected to negatively impact ATI products. Also, AMD’s overall reduced market capitalization cannot support a previously determined value of ATI, the firm said.
The company has not yet determined the amount of the impairment charge, but noted that it will disclose its decision within four days of “determining such an estimate or range of estimates.” The impairment charge will be reflected in AMD’s Q4 financial report.
Additionally, AMD will take an impairment charge related to its investment in its former flash memory unit Spansion. The change in Spansion’s stock price will cost AMD $20 million, which will also be included in the Q4 report, the company said.