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AMD Cutting 1,000 Jobs, Selling Two Chip Plants

AUSTIN-The writing's on the wall for two chip plants and another 1,000 jobs in Austin's manufacturing arena. Advanced Micro Devices says the cuts will save $125 million and allow it to focus on flash memory devices and PC processors.

By Tim Green | Updated on September 25, 2001

AUSTIN-The capital city’s economy, already suffering from the severe technology slowdown and a resulting glut of sublease office space, received another blow Tuesday. Advanced Micro Devices Inc. said it will close two chip manufacturing plants in Austin and cut 1,000 jobs. The company will have about 3,200 workers in Austin after the reductions.

The closures are part of an extensive restructuring in which the company will cut another 1,300 from its operations in Penang, Malaysia. The total of 2,300 jobs is about 15% of AMD’s work force. The company, based in Sunnyvale, CA will take a one-time charge of between $80 million and $110 million in the current quarter, its third. The company said the restructuring should reduce costs by $125 million a year.

The two plants being closed–Fabs 14 and 15–are the company’s oldest, built in 1984 and 1986, respectively. Each has 22,000 sf of clean-room space and they are not equipped to make chips of recent design. By contrast, AMD’s Fab 25, the company’s second-newest plant, has 86,700-sf of clean room space. “Their technology is at least 10 years old,” Greenagel says of the older fabs, “which is ancient.”

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