With an estimated 16,000 staff worldwide, the announcement sees AMD shedding 2.6 percent of its total workforce.
The layoffs include positions in sales, marketing, administration and engineering as the company integrates ATI while continuing to compete against Intel.
A spokesman for AMD said that the measures would affect all departments in all geographies, although the job cuts are known to include about 80 employees in Austin, Texas, 40 in the firm's Sunnyvale and Santa Clara facilities, and 50 in Markham, Ontario.
AMD still plans to go ahead with a chip plant at the Luther Forest Technology Campus in Saratoga, for which it is being offered a US$1.2bn package of incentives.
Last month AMD reported a US$611m first-quarter loss, compared with a US$185m profit in the same quarter in 2006.
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