Decline in PC Demand Leads to Match Loss for Chip Maker Workers

January 20, 2009 ( - Advanced Micro Devices Inc. is suspending its 401(k) match, a company spokesman said, according to MarketWatch.

“As a result of the continuing global economic downturn, we have determined that we need to take difficult but prudent actions designed to reduce our costs,” MarketWatch quoted Michael Silverman as saying. “Beginning in February, we are undertaking several steps to lower costs, including temporarily reducing employee base pay and suspending some benefits programs.”

The chip maker said Friday that it plans to cut its workforce by 9%, or roughly 1,100 positions. The job cuts will be done “through a combination of attrition, the previously communicated divestiture of the handheld business and an additional headcount reduction of approximately 900 positions,” Silverman said, according to the news report.

In addition, the company’s executive chairman, Hector Ruiz, and chief executive Dirk Meyer will each take a temporary 20% cut in base salary, and AMD will also carry out salary cuts in the United States and Canada of 15% for vice presidents and above; 10% for non overtime-eligible employees; and 5% for all overtime-eligible employees.

AMD is struggling through a severe slump, marked by a steep decline in demand for personal computers, the news report said.

AMD is one of a number of companies that are not only cutting staff, but reducing benefits in response to the economic downturn (see Saks Suspends 401(k) Match, Drops 1,100 Jobs ).