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Nvidia announces layoffs

Graphics chip maker said it plans to lay off 360 people by the end of October

Graphics chip developer Nvidia plans to lay off 6.5 per cent of its workforce, the company announced Thursday.

About 360 people worldwide will lose their jobs by the end of October, Nvidia said. The Santa Clara, Calif., company plans to offer severance, counseling and job placement services for the affected workers.

In a statement, Nvidia said the layoffs will allow it to continue to invest in strategic growth areas, including its CUDA (Computer Unified Device Architecture) parallel computing technology and its Tegra mobile single-chip computer. The move will also help the company become more competitive and boost its financial performance, it said in the statement.

Nvidia will take a US$7 million to $10 million charge in the third quarter of fiscal 2009 to cover severance and other costs related to the reduction.

The layoffs come about a month after Nvidia took a one-time charge of $196 million against its second-quarter revenue to cover the cost of replacing bad chips used in Hewlett-Packard and Dell laptops.

Nvidia also faces a lawsuit that was filed in California alleging that it hid a series of defects in its chips that caused the chips to fail.

The company did not indicate that the layoffs were related to the recent costs associated with replacing the bad chips.