AMD is cutting five percent of its workforce

[Shawn Knight]

Advanced Micro Devices is planning to trim about five percent of its global workforce as part of a cost-saving restructuring effort. Drew Prairie, a spokesperson for the company, told Reuters that just shy of 500 employees would lose their jobs.

AMD expects to record charges to the tune of $42 million related to the cuts although it’ll save around $58 million in operating expenses next year as a result.

The jobs cut will be among white-collar workers including those at its Austin, Texas and Sunnyvale, California headquarters. We’re told that AMD has no plans of closing or idling any fabrication operations.

As part of the effort, AMD said it also aims to streamline its sales efforts, create regional presidents to oversee sales in Chinese and European markets and outsource application development and tech support. Product development plans will remain unchanged, the spokesperson said.

AMD has struggled to compete with larger rival Intel for many years and like the rest of the industry, is feeling the squeeze from the global slowdown in PC sales. In its most recent quarter, AMD’s revenue fell 35 percent year-over-year. Despite focusing on other avenues like game consoles and low-power servers, the company hasn’t yet been able to turn the corner.

Shares in AMD closed at $1.83 on Friday. At its highest in mid-2000 during the early Athlon days, shares were trading at more than $92.

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https://www.techspot.com/news/62314-amd-cutting-five-percent-workforce.html

 

[Evernessince]

I wouldn't get my hopes up for AMD. They couldn't compete with a larger workforce and these cuts will only make things worse. Nvdia and Intel can block the market and keep AMD on a string while they reap healthy profit margins and expand into other businesses.

The only thing positive that could happen would be for AMD to be bought. ARM will catch up to Intel before AMD does.

 

[Techman3]

I wouldn't get my hopes up for AMD. They couldn't compete with a larger workforce and these cuts will only make things worse. Nvdia and Intel can block the market and keep AMD on a string while they reap healthy profit margins and expand into other businesses.

The only thing positive that could happen would be for AMD to be bought. ARM will catch up to Intel before AMD does.

Unless Zen will really be a breakthrough, and/or AMD video cards work better with DX12 than Nvidia...... Hopefully!

 

[VitalyT]

The way AMD employees come and go could run a wind mill, and I'm betting on things getting only more chaotic, unless they find a CEO with more sense.

 

[kuroiei]

AMD is competing with TWO giants to be honest - Intel and Nvidia at the same time. No other of its rivals is in such a position. Regrouping might be good... Personally I prefer Nvidia cards but AMD CPUs (for common everyday usage). Would like to see something good and new if AMD catches its breath at last.

 

[dividebyzero]

The way AMD employees come and go could run a wind mill, and I'm betting on things getting only more chaotic, unless they find a CEO with more sense.

It's a pity AMD aren't high profile enough to tempt Renée James - although I suspect it would be bad enough for her trying to combat Intel and Nvidia, without having to battle AMD's divisive board of directors as well.

Kind of worrying that AMD are outsourcing some their IT to third parties as part of the job cutting. That seldom goes well.

 

[red1776]

Then again, The 'leaning of the machine' is very common right before a buyout or investor comes forward and there has been a lot of talk of '' talks" happening of late.

 

[VitalyT]

It's a pity AMD aren't high profile enough to tempt Renée James - although I suspect it would be bad enough for her trying to combat Intel and Nvidia, without having to battle AMD's divisive board of directors as well.

Kind of worrying that AMD are outsourcing some their IT to third parties as part of the job cutting. That seldom goes well.

Maybe Renée has been too hard womanising up the company, which didn't work well? That wouldn't help AMD either.

 

[Mr Mister]

They really have to fix that power and heat issue.

 

[dividebyzero]

Then again, The 'leaning of the machine' is very common right before a buyout or investor comes forward and there has been a lot of talk of '' talks" happening of late.

"of late"? (see below*)
Personally, I'd think that Silver Lake pulling out of investing in AMD as reported a few days ago allied with the job cut announcement now might be more than coincidental, and AMD are just announcing the cull to get ahead of next weeks Q3 2015 earnings call, when analysts and shareholders start asking questions.


*In November 2012, Qualcomm AND Samsung were supposedly interested in buying AMD
In 2013 Intel were supposedly buying AMD
In late July 2014, Qualcomm were supposedly interested in buying AMD...
...which surfaced again a few months later
In January 2015, BLX were supposedly interested in buying AMD
In March 2015, Samsung were again supposedly interested in buying AMD
In June 2015, Xilinx were supposedly interested in buying AMD

The only real trend seems to be that rumours of acquisition always seem to surface in time to bolster AMD's stock price prior to a disastrous quarterly reporting.

Maybe Renée has been too hard womanising up the company, which didn't work well? That wouldn't help AMD either.

Doubtful. I'm guessing the McAfee buyout was more a case of lowering her stock within Intel. Hardly an issue at AMD, since they pursue software development about as hard as the NSA pursue publicity.

 

[EClyde]

The economy isn't good and that isn't AMD's fault. Median income over the last 7 years is down 6.5 %
Time for new washington leadership. I buy AMD graphics and Intel CPU's. There are other tech companies in the news letting folks go

 

[dividebyzero]

The economy isn't good and that isn't AMD's fault.Time for new washington leadership. I buy AMD graphics and Intel CPU's. There are other tech companies in the news letting folks go

I think you'll find that the economic downturn - in relation to semiconductor companies, isn't affecting AMD's competitors anywhere close to the implosion AMD faces - for one very simple reason.
In 2006, AMD borrowed $US2bn to pay for the ATI acquisition. In 2015, AMD still owes $US2bn (which comes due in 2019-20). AMD are being eviscerated by the interest on their loans, and it isn't aided by the fact that AMD sell smaller volumes at lower average selling prices.
You are right in stating that other tech companies cut jobs, but none of AMD's contemporaries have cut 30+% of their workforce and sold off most of their non-IP assets.

 

[cliffordcooley]

AMD are being eviscerated by the interest on their loans

Don't you just love how leaches don't care if they kill a business. Becuase they know they can move on to the next one.

 

[tomkaten]

And what's the alternative, lending money by the truckload and then getting all magnanimous ?

It doesn't work like that in the real world. You can't pay back, you don't borrow, it's as simple as that imo. Just look at Greece...

 

[cliffordcooley]

And what's the alternative, lending money by the truckload and then getting all magnanimous ?

My question is how much has been paid back but non of it went to Principal, nothing short of legalized theft.

 

[GeforcerFX]

I see a buyout in there future. Out of all the rumored companies I would like to see Qualcomm buy them out.

 

[dividebyzero]

I see a buyout in there future. Out of all the rumored companies I would like to see Qualcomm buy them out.

AMD could also turn into a design house like ARM Holdings. Design GPU and processor logic IP and license it to third parties. If they took this option they could then spin off the console business to Microsoft and/or Sony for future console chips that don't already leverage the IP that has been licensed for current APUs.
AMD could also spin off the Radeon group and partner with an interested party for licensed FirePro/HSA deployments and licensed discrete GPU business. The income from spinning off the divisions would likely be enough to cover the debt notes coming due. Not sure if AMD could replicate the model for CPUs though. AMD has already farmed out chipset development to third parties, and most of the big players that could buy up/into AMD wouldn't get the x86 licence even if they wanted it - most are already ARM licensees in any case. Google might be an option if they haven't already decided on going fully ARM-based.

 

[amstech]

Meanwhile I am still waiting to get a 980Ti for $500....sigh.