Advanced Micro Devices Inc. (AMD) struggling to compete with Intel in processors, gave a sales forecast that missed estimates and said it’s cutting 7 percent of its workforce. For the third quarter, the company announced revenue for the third quarter of 2014 of $1.43 billion, operating income of $63 million and net income of $17 million, or $0.02 per share. Non-GAAP operating income was $66 million and non-GAAP net income was $20 million, or $0.03 per share.

"AMD's third quarter financial performance reflects progess in diversifying our business," said Dr. Lisa Su, AMD president and CEO. "Our Enterprise, Embedded and Semi-Custom segment results were strong; however, performance in our Computing and Graphics segment was mixed based on challenging market conditions that require us to take further steps to evolve and strengthen the financial performance of this business. Our top priority is to deliver leadership technologies and products as we continue to transform AMD."

AMD's Computing and Graphics segment revenue decreased 6 percent sequentially and decreased 16 percent year-over-year. The sequential decrease was primarily driven by lower chipset and GPU sales. The year-over-year decline was primarily due to decreased notebook processor and chipset sales.

The company's Enterprise, Embedded and Semi-Custom segment revenue increased 6 percent sequentially and 21 percent year-over-year primarily driven by increased sales of semi-custom SoCs.

As a part of AMD's ongoing transformation work, the company has developed a targeted restructuring plan to better position AMD for profitability and long-term growth.

The restructuring plan, which will be largely implemented in Q4 2014, is expected to reduce global headcount by 7 percent, largely expected to be completed by the end of Q4 2014. AMD will also align its real estate footprint with its reduced headcount.

"While decisions that impact the size of our global team are never entered into lightly, this is the right step to ensure we prioritize our resources and engineering investments in our highest-priority opportunities that can drive improved profitability and long-term growth," said Dr. Su.

Looking ahead to its fourth-quarter outlook, AMD said it expects a 13 percent decline in revenue, plus or minus 3 percent.