Job cuts are an ongoing occurrence at AMD, and the latest round affects 3% of its employees, which translates to 500 people. This follows the sale of its digital TV business.

The cuts are AMD's second big round of layoffs this year and come amid a huge restructuring. So far this year, AMD had already laid off 1,600 workers before the latest announcement, replaced its chief executive and revealed plans to spin off its factories — which represent a huge expense for chip makers — in a bid to save money.

AMD had deep financial problems even before the economy soured, losing $5.6 billion over the past eight quarters, and Wednesday's announcement says more about the Sunnyvale-based company's anxiousness to improve its balance sheet than the effect of the economy on the chip industry as a whole.

AMD is the world's No. 2 maker of computer microprocessors, the electronic brains of personal computers, and most of its pain lately has been self-inflicted: The company has been hurt by product delays and a costly acquisition, both of which have contributed to heavy losses and allowed bigger rival Intel Corp. to gain more ground. Intel owns about 80 percent of the worldwide microprocessor market; AMD has essentially the rest.