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.

“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.

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“).