AMD just announced that it is ready to let an additional 500 people go, or three percent of its workforce. This is the second big cut in this year, as ending with Q3 2008 AMD fired 1,600 people, or almost 10 percent of its staff.

Naturally, the company will blame the economic crisis; but the reality is that it will take a while until AMD recovers from the lack of a decent CPU to take on Intel's Core 2 generation of products. Intel already has Core i7 Nehalem generation ready, while AMD still struggles to ship its first 45nm quad-core server parts. Even when the company get its act together with 45nm quad-cores, it will still miss the decent dual-core with 45nm K10.5 architecture and from what we know, such a chip is not due until Q2 2009, if not even later. According to the company, the workforce will be cut to 12,500 in 2009.

AMD started the year with 15,500+ employees. The company will start recovering, but don’t expect miracles in 2009, they will just get much better than they used to be in 2008. When it comes to graphics, the company has never been better in its history; but the issue is that graphics doesn’t earn you enough money to feed the CPU guys.

154 from these 500 will be from Austin. The holy goal is to return to real profitability in 2009.

More here.