Advanced Micro Devices Inc.'s plans to cut 10 percent of its work force.

AMD said that it will cuts more than 1,600 workers out of 16,800 worldwide. The cuts were widely expected as the slumping chip maker has been battered by product delays and burdened by heavy acquisition costs.

AMD also warned investors that first-quarter sales were lower than expected across all business lines, a miss that surprised Wall Street. Sales for the three months ended March 29 came in at about $1.5 billion, a 15 percent drop from the year-ago period and short of the $1.61 billion that analysts polled by Thomson Financial were anticipating. The company is scheduled to report its full quarterly results April 17.

AMD shares fell 18 cents, or nearly 3 percent, to $6.16 in after-hours trading. The stock had risen 11 cents to close at $6.34 before the layoffs and sales warning were announced.

The news comes as momentum in the notoriously volatile semiconductor industry has turned for the moment against AMD, whose own momentum just a couple of years ago was a major factor in a major restructuring by Intel.