The move is part of a drive to cut costs by $350m (£222m).

The company said it would make the job cuts by mid-2003 and the move would lead it to make a charge of "several hundred million dollars" in the final quarter of the year.

AMD, a leading supplier of computer-grade microprocessors, has been struggling because of weak demand for personal computers.

It is also facing fierce competition from rival chip maker Intel.

Losses felt worldwide

AMD said the job losses would be made in the US, Europe and Asia.

The company had warned last week that it would be making "significant" job cuts, in an attempt to trim costs.

"As part of our ongoing strategy, we are taking decisive measures to reduce operating and capital expenditures," said president and chief executive officer Hector Ruiz.

Last month, AMD said losses during the third quarter more than doubled to $254.2m from $97.4m in the same period last year.

Intel has also been struggling. Its third quarter results announced last month came in below analysts' expectations, and it warned that the information technology sector was still showing no signs of improvement.