AMD could be set to cut staff by up to 20 percent following a larger drop in third quarter revenues than had been expected.
Sources close to AMD told Reuters the chip maker is preparing to lay off between 10 and 20 percent of its workforce of 11,705 employees. Others sites have claimed staff cuts could reach up to 30 percent.
The rumours, which AMD has not confirmed, come after the company forecast a 10 percent revenue drop from the previous quarter in its financial results.
Just like its rival Intel, AMD has suffered from a tough PC market. Analysts warned last week that the industry could see a whole-year sales decline for the first time in a decade, with IHS iSuppli forecasting worldwide shipments will fall by 1.2 percent in 2012.
Analysts have also signalled a poor third quarter, with shipments falling around eight percent from the second quarter.