AMD planning layoffs with Phenom update?

Advanced Micro Devices is getting set to launch updated Phenom processors amid rumors that the chipmaker is reducing its workforce by 5 percent.

AMD is slated to begin shipping quad-core Phenom 9850, 9750, 9650, 9550, and 9150 processors in the coming weeks, according to sources close to the company. The "50" branding scheme indicates that the processors are the B3 version of the Phenom that fixes the "TLB" bug. This was first reported in DigiTimes.

Later, AMD will also ship updated triple-core processors, including the 8750 and 8560. Updated triple-core processors will not necessarily be B3 versions, however, according to sources.

Maybe more importantly, AMD is in the midst of handing out pink slips, according to a report in The Inquirer. The report states that AMD is "quietly" cutting about 5 percent of its workforce across the board, not in specific areas. The report also states that AMD may badly miss its numbers this quarter. AMD, when contacted, said that it can't comment on "rumor and speculation."

In related news, AMD announced Thursday the appointment of Nigel Dessau as chief marketing officer. Dessau joins AMD from Sun Microsystems, where he was senior vice president of storage marketing and senior vice president of alliances and licensing. Prior to that, he was at StorageTek and IBM. Dessau will be based in Austin, Texas and report to AMD's Office of the CEO.

Deassau will be challenged to market products if AMD doesn't deliver them in a timely manner and at better performance levels. Over the last year or so, AMD has botched processor launches and delivered underperforming products. The quad-core Barcelona was launched in September of last year but major computer suppliers such as Hewlett-Packard (HP) and Sun Microsystems have yet to ship systems. (Shipments are expected soon.) Though quad-core and triple-core Phenom processors are available from HP, for example, the reception has generally been muted. AMD-ATI's 3800 series of graphics cards have been one of the few bright spots.

In January, CEO Hector Ruiz said that he expects AMD to return to profitability "in the second half of the year beginning in the third quarter...We're not going after unit share just for the sake of unit share."

Note: HP is offering systems with the Phenom X3 8600B, (2.3 GHz), Phenom X4 8700B processor (2.5 GHz), and Phenom X4 9600B processor (2.3 GHz), among other AMD chips.