Advanced Micro Devices (AMD) is to trim 1 600 people from its workforce – or 10% of the 16 800 people it currently employs.
The cuts will take place around the world and should be completed by September.
The chip-maker is expecting to turn in worse-than-anticipated first quarter results and the job cuts are part of a plan to return the company to profitability.
The poor quarter's performance was blamed on lower sales during a seasonal decline.
Sales figures were also affected by a bug and then the late availability of the company's Barcelona quad-core processor.