The job cut is part of a major restructuring plan to streamline its business and reduce costs as the chipmaker struggles to compete with Intel in PC processors.
Both AMD and Intel are going through a tough phase in the global PC market. IDC recently said PC shipments fell 11.8 percent to 66.1 million units in Q2 2015. Gartner said PC shipments declined 9.5 percent to 68.4 million units. PC shipments are projected to decline 4.4 percent in 2015.
Sunnyvale, California-based AMD will record charges of about $42 million for the restructuring plan, which includes outsourcing some IT services and application development. The cuts are expected to bring savings of about $2 million and $7 million in the last two quarters of this year, respectively, and savings of about $58 million in 2016, said AMD on Thursday.
AMD is losing market share to Intel in processors for PCs and servers. The company had about 9,500 employees at the end of June, Bloomberg reported.
While the job cuts will take place across the organization, proportionally fewer engineers will be let go — an effort to preserve the company’s chip-design capabilities.
The chipmaker’s plan to sell 25 percent equity stake to private equity firm Silver Lake Management did not work out. AMD is also considering other strategic options.
IDC earlier said the slow PC shipments were largely anticipated as a result of stronger year-ago shipments relating to end of support for windows XP as well as channels reducing inventory ahead of the release of Windows 10. Weaker or changing exchange rates for foreign currencies have increased PC prices in many markets.