AMD to cut 7% of its global workforce after poor Q3

[Himanshu Arora]

Just a week after AMD CEO Rory Read stepped down, to be replaced by COO Lisa Su, the company has announced that it will layoff around 7 percent of its global workforce in an effort to improve its profitability.

The announcement came as the company reported disappointing third-quarter results, with revenue of $1.43 billion, down 2 percent yearly, and net income of $17 million, or 2 cents a share. On a non-GAAP basis, AMD reported net income of $20 million, or 3 cents a share, missing analysts’ estimate of 4 cents a share.

"AMD's third quarter financial performance reflects progress in diversifying our business", said Su, adding that the company's Enterprise, Embedded and Semi-Custom divisions were strong, but the Computing and Graphics division, responsible for desktops and laptops GPUs, suffered during the quarter.

The division's revenue decreased 6 percent from last quarter and 16 percent year-over-year, something AMD attributed to weaker chipset and graphics processor sales which in turn was due to weak demand for laptops. The operating loss for the division stood at $17 million, compared to $6 million reported in the last quarter and $9 million in Q3 last year.

The outlook for Q4 isn't good either, with the company expecting a revenue drop of 13 percent (plus or minus 3 percent) compared to Q3.

AMD currently has around 10,149 employees, which means around 710 people will be laid off. The job cuts, most of which will be on the operation side, will be complete by the end of the year, and will save the company about $9 million this year and $85 million in 2015. "We know what we need to do to improve performance going forward, and are taking actions", Su said.

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https://www.techspot.com/news/58475-amd-cut-7-global-workforce-after-poor-q3.html

 

[JohnCB]

...the company's Enterprise, Embedded and Semi-Custom divisions were strong, but the Computing and Graphics division, responsible for desktops and laptops GPUs, suffered...

I'm actually surprised by that. I thought their 290s were priced very competitively and selling well. If anything I had expected to read that their Embedded systems were suffering and their GPU divisions were doing well.

 

[GhostRyder]

I'm actually surprised by that. I thought their 290s were priced very competitively and selling well. If anything I had expected to read that their Embedded systems were suffering and their GPU divisions were doing well.

The problem is not the cards or APU/CPU's themselves and more of the lack of OEM support. People that build machines were snatching up the 290 series like hot cakes and even on the lower end because of the price to performance ratio but in the end the enthusiast market is much smaller than the general public.

More people who buy PC's are going to walk into Walmart/bestbuy/Frys/Computer Store of your choice to pick up a latop/tablet/desktop than run out and build one from scratch and AMD has very few products in OEM machines lately. The laptops are seeing a bit of adoption but the PCs are far and few apart on top of the fact tablets are a hot commodity and AMD has nothing really inside a tablet.

When AMD gets more OEMs (Which has become their focus after the recent fiasco) under their belt and starts delivering more they will come back in a higher power area but its going to be a few years of work still before that really takes effect. Winning the consoles gives them a bonus because it helps them in sales and makes more OEM's willing to start giving them a chance along with programmers working with their products. It will take time but as long as AMD puts a hard focus on deliver the APU's for laptops and eventually tablets the rest will just follow suit.

 

[JohnCB]

The problem is not the cards or APU/CPU's themselves and more of the lack of OEM support. People that build machines were snatching up the 290 series like hot cakes and even on the lower end because of the price to performance ratio but in the end the enthusiast market is much smaller than the general public.

Excellent point. Intel is dominating the laptop market and quite frankly even the low-end machines friends/family/grandparents are using are i3s as well.

 

[Guest]

Slashing prices on R Card and Slashing Jobs....