AMD to cut 15 percent of workforce, sees weak Q4 ahead

AMD to cut 15 percent of workforce, sees weak Q4 ahead

Summary: The bad news keeps coming for AMD as the chipmaker struggles to navigate existing PC industry trends.

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TOPICS: Hardware, Processors
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AMD said it will cut about 15 percent of its workforce as its fourth quarter forecast came in lower than expected. CEO Rory Read said AMD has been hit by the PC's industry's period of "very significant change."

For the fourth quarter, AMD is now projecting revenue to fall 9 percent from the third quarter, which was also disappointing. A sequential decline in revenue from the third quarter to the fourth quarter is rare for a chipmaker.

AMD's plan is to take out $20 million in expenses in the fourth quarter and $190 million in 2013. Layoffs will be the largest cost savings. AMD said it expects to complete the layoffs in the fourth quarter and take an $80 million restructuring charge.

The company said that it is aiming to have break even operating income at $1.3 billion in quarterly sales.

Read added that "the trends we knew would re-shape the industry are happening at a much faster pace than we anticipated."

As for the third quarter, AMD reported a net loss of $157 million, or 21 cents a share, on revenue of $1.27 billion, down from $1.69 billion a year ago. On a non-GAAP basis, AMD lost 20 cents a share. AMD also said it took a $100 million inventory writedown from tis Llano accelerated processor units. The company already indicated that the third quarter was dreadful

CNET News reported last week that AMD was prepping layoffs

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Topics: Hardware, Processors

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8 comments
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  • The PC is in decline.

    Don't know what else there is to say- it's plain for anyone to see, unless you don't want to see...
    pdq
  • They should fire the new CEO

    Both Meyer and Read don't understand the consumer market, which is where AMD should be targeting their business. Meyer didn't want to embrace the consumer electronics side of computing, and Read has no experience with it, coming from Lenovo, and previously, IBM. Lenovo isn't a consumer-friendly company.

    What they should be doing is going after computing and electronics companies that are tailored towards the consumer markets. And they need compelling offerings for them too. The A-series are good, but there's still a huge market that is looking at cheaper computers than the A-series APU's are designed for too. They need the lower-priced E-series (and C-series) to be available in bulk quantities for OEM's, and they should seriously look at getting in bed with ARM. They could kill Intel by working their DX11 GPU magic and 64-bit and virtualization support into ARM's designs. And they can't bring out the tablet chips fast enough. They shouldn't feel the need to have to work on so many different chip designs, all with different TDP's either - the C-50, Z-60, and Z-01 are all the same chip with just different TDP's. They need to get quantity deals going with major OEM's. HP used to be a huge supporter of AMD, but that support is slipping with HP's market share falling. They need to target Lenovo, and they need assurances from Lenovo that they'll ship machines to all of Lenovo's regional markets (many markets only carry Think brand, like here in Canada). Companies like Sony, Samsung, and other Intel-only lock-ins like Dell need to be approached. It's time to quit cherry-picking OEM's and get everybody on-board. They only stand to gain if they have more OEM contracts. ...and then there's the elephant: Apple. Apple WAS almost ready to ship an AMD A-series APU-based MacBook, but they bowed out at the last minute. If they were to get an agreement for x-number of chips required (which was supposedly the limitation that stopped Apple from buying from AMD), THEY NEED TO JUST DO IT, and not make excuses about low yields or production rates. Get the chips made by as many foundries as necessary to make the sale.
    Joe_Raby
    • Yes and No

      AMD's strong suit has always been catering to the retail consumer market. It's the enterprise and education market that AMD has struggled to gain a foothold. I believe it's a legacy of the days when Intel had these anti-competitive agreements with the likes of IBM, Dell and HP mostly to keep AMD out of the enterprise and education markets.

      It was almost a deathblow to AMD back then because they couldn't get their chips into these computers and that's where all the big money was. For example, I work at a higher education institution that's on a 3 year renewal cycle for staff and faculty computers. Guess how many have AMD chips? None. And that has always been the case. We got close to adopting AMD chips when AMD came out with their original Athlon/Opteron supporting x86 32-64bit software because the Itanium was too expensive and problematic in that it didn't support lagacy 32bit software. Well, it never came to pass because of Intel's secret agreements at the time with the computer vendors.
      laequis
      • It's not just the server market

        What they need to do is reign in the vendors.

        When you look at vendors like HP, they'll have umpteen computer choices, all with Intel processors...and then they have the AMD option. AMD needs to go to the vendors and say "we have chips for every form factor and we want you to use them all". This would make OEM's expand their product lineup to balance out the AMD and Intel systems. Dell did have AMD systems in the last couple of years - but only 2 models. Lenovo has 2 laptop series in ThinkPad's with AMD - the Edge and X100's. All the rest are Intel. AMD should be offering discounts to an OEM if they carry every chip family. It would mean more sales for AMD over a wider spectrum of PC's.
        Joe_Raby
  • nothing good

    The reason apple stopped bying from AMD is because they cannot deliver the best products available on the market. Lenovo machines are pieces of #%!. You ever try using a lenovo X...????

    I wouldn't wish these pos' on my worst enemy. Intel already won the lenovo contract for some more crappy tablets that no one will buy. Ipad or bust, and if you can't afford that, go get a Samsung / Nexus...
    duc15man
  • I was a really big ati/amd fan back in the day

    But it seems ever since the merge... Intel has been beating the living crap out of amd lately.. so my 7 gaming rigs all have an intel processor.. some have a nividia card, others a radeon.. Im more inclined to go full on nvidia next time...
    DJK2
  • I agree.

    The purchase of ATI was too expensive though it was the correct choice. The problem was that it's taken way too long to see the results of that acquisition in integrated graphic engines on their chips. It took way too long for them to come out with their first APU chips, and they started late and underestimated the mobile chip market.

    However, I still have faith in that they will right the ship going forward. Let's not forget this company has been around almost as long as Intel. That is saying a lot considering the historical anti competitiveness of Intel in this market.

    AMD has never given up in believing that they could offer a better product at a better price. If it wasn't for AMD, we all would be using expensive Itanium based hardware.
    laequis
    • AMD was sensible...

      ....but I would've loved seeing EPIC architecture in PC's. There is a lot to like about the old 64-bit legacy-free architecture. Remember that EFI was introduced on Itanium years before any PC platform.

      Imagine if EPIC got shrunk down to the power efficiency of ARM....

      MY GOD! Just imagine! :-O
      Joe_Raby