The Markets January 20, 2009

Computer Chip Maker Drops Match

Advanced Micro Devices Inc., a maker of computer chips, said it is suspending its 401(k) match because of a decline in demand for computers.
Reported by

“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,” said spokesperson Michael Silverman, according to MarketWatch. “Beginning in February, we are undertaking several steps to lower costs, including temporarily reducing employee base pay and suspending some benefits programs.”

The technology company 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.

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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“). Also, it is not the first company in the computer technology business to announce a match suspension (see “Oscilloscope Maker Puts 401(k) Match on Hold“).

Compliance January 18, 2009

Miller, Andrews Threaten to Block Advice Regulation

With the ink barely dry on the Department of Labor’s final regulations on investment advice, two Democratic Congressmen have promised to block it.
Reported by
Congressman George Miller (D-California), the chairman of the House Education and Labor Committee, and Congressman Rob Andrews (D-New Jersey), issued the following statement:
“We are disappointed that the Bush administration moved forward to enact a new regulation that will make it harder for workers to receive fair and honest advice when making key financial decisions about their futures.
“With just a few hours to go, the Bush administration is still scrambling to give Wall Street a last-minute payback. Today’s regulation will allow financial services companies to reap windfall profits at the expense of workers and tips the scales towards special interests by opening the door to conflicts of interest among the very consultants purporting to offer unbiased investment advice. At a time when Americans are rightly concerned over their financial future, it’s unfortunate that the Labor Department is using its time to give special interests paybacks rather than working to actually help workers.
“Repeat” Performance
The statement was a near verbatim repeat of Miller’s statement when the Labor Department issued the initial proposal in August (see Miller Slams DoL Advice Proposal), when he called the proposal “nothing less than a boon for Wall Street and corporate executives” and urged the DoL to “immediately withdraw these harmful proposals.’
Obviously, the Labor Department didn’t listen to Congressman Miller in August. In fact, for the DoL, the final regulation announced Friday (see DoL Finalizes Rules on Investment Advice) simply served to implement the statutory exemption for investment advice added to the Employee Retirement Income Security Act (ERISA) by the Pension Protection Act (PPA), including general guidance on the exemption’s requirements, including computer model certification and disclosures by fiduciaries.
On the other hand, this time these Congressmen have something that may well work in their favor – something alluded to in the final sentence of their statement; “As we transition to a new administration, we will use every tool at our disposal to block implementation of this harmful regulation.’

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