The Inquirer is reporting that AMD (NYSE: AMD) is cutting 5% more of its staff.
This may be an indication that the chip company will miss its numbers for the first quarter. AMD has $5 billion in debt and has taken huge write-offs for its purchase of graphics chip company ATI. Without strong cash flow making debt service payments could become impossible. In the current environment, refinancing debt could be tough.
Shares in AMD are at $6.15. Two years ago they were above $36.
If the news about AMD is correct, the stock is likely to fall much lower. It is hard to imagine how CEO Hector Ruiz keeps his job.
Douglas A. McIntyre