8-KFinancial EventsExhibits & Filings

ADVANCED MICRO DEVICES INC 8-K Report, Exit or Disposal Costs (Nov 3, 2011)

Filed November 3, 2011For Securities:AMD

Summary

Advanced Micro Devices, Inc. (AMD) announced a significant restructuring plan on November 3, 2011, aimed at enhancing its competitive position and cost structure. This plan involves a workforce reduction of approximately 1,400 employees, with notifications occurring in late 2011 and early 2012. The company anticipates incurring substantial restructuring charges, estimated at $101 million in Q4 2011 and an additional $4 million in fiscal year 2012. These charges include severance, employee benefits continuation, contract termination costs, and asset impairments. While a significant cash outlay is expected in the near term, AMD projects substantial operational savings, approximately $10 million in Q4 2011 and $118 million in fiscal year 2012, primarily from reduced operating expenses. The company is also assessing potential recapture of foreign tax holiday benefits due to the workforce reduction.

Key Highlights

  • 1AMD is implementing a restructuring plan involving the termination of approximately 1,400 employees.
  • 2The company expects to incur approximately $101 million in restructuring charges in the fourth quarter of fiscal year 2011.
  • 3Additional restructuring charges of approximately $4 million are estimated for fiscal year 2012.
  • 4The restructuring is designed to improve cost structure and competitive positioning, focusing on faster-growing market segments.
  • 5AMD anticipates significant operational savings, projecting $10 million in Q4 2011 and $118 million in fiscal year 2012.
  • 6The plan includes severance costs, contract termination fees, and asset impairments.
  • 7There is a possibility of recapturing certain foreign tax holiday benefits as a result of the workforce reduction.

Frequently Asked Questions

The primary reasons cited for the restructuring plan are to strengthen AMD's competitive positioning, implement a more competitive cost structure, and rebalance the workforce to better address faster-growing market segments.

Approximately 1,400 employees are expected to be impacted by this workforce reduction, with termination notifications occurring during the remainder of Q4 2011 and Q1 2012.

AMD estimates restructuring expenses of approximately $101 million in Q4 2011 and $4 million in fiscal year 2012. The company also anticipates significant operational savings, projecting $10 million in Q4 2011 and $118 million in fiscal year 2012.

Yes, out of the total Q4 2011 restructuring expense, approximately $56 million is expected to be cash expenditures in Q4 2011, with additional amounts in fiscal years 2012 and 2013.