Advanced Micro Devices said Monday that it will incur $70 million in restructuring costs in the fourth quarter, according to a filing with the Securities and Exchange Commission.
The filing also cited fourth-quarter layoffs of 600 employees. An AMD spokesperson said that approximately 500 layoffs were announced in November, but that the company "ended up closer to 600."
The restructuring dollar figure is new, AMD said. The company now estimates that the "restructuring expense that it will record in the fourth quarter of fiscal 2008 will be approximately $70 million, based on the restructuring plan approved by the Company on December 19, 2008."
Of the $70 million, about $34 million is related to severance and employee benefits, $13 million is related to contract or program termination costs, approximately $17 million is connected to asset impairments, and about $6 million is related to exit costs at facilities.
Previously, AMD had reported in a Form 10-Q filing that it expected to cut approximately 500 employees and take a charge to operations in the fourth quarter of fiscal 2008 of approximately $50 million.
Future cost reductions are also planned. "Further cost reduction actions will result in additional charges in the first half of fiscal 2009, which the company cannot estimate at this time," according to Monday's Form 8K filing.
AMD also said that on December 19 it determined that it would incur a material charge for impairment of assets during the fiscal quarter ended December 27 related to the 2006 acquisition of ATI Technologies. "The Company concluded that the current carrying value of its goodwill...was impaired." AMD added: "This conclusion was reached based on the results of an updated long-term financial outlook for the businesses of the former ATI Technologies Inc. in light of the current market conditions and economic outlook" and "due to the deterioration in the price of the Company's common stock and the resulting reduced market capitalization."
AMD expects that the impairment charge "will be material, but, as of the time of this filing...is unable to estimate the amount or range of amounts of the impairment charge. The Company will disclose such an estimate or range of estimates in a filing with the SEC promptly and in any event within four business days of determining such an estimate or range of estimates," according to the Form 8K.
The Sunnyvale, Calif.-based chipmaker split in two earlier this year in order to defray the burdensome costs of its manufacturing operations. The manufacturing operations received a massive investment from Mubadala Development Co. and is now run as a separate concern called The Foundry Company.
The price of its stock has sunk from about $6 in June of this year to a little more than $2.