AMD to lay off 1,400 workers, blames PC industry slowdown [Update: Senior Execs too]

AMD is laying off 1,400 of it's 12,000 staff after blaming the PC industry "slump" for raising costs. The move is planned to save $200 million in costs by 2012, according to Yahoo

At the end of Q3 2011, AMD had 12,00 staff, which means the job cuts are around a 12% deduction. The company blames slowing down PC markets for the cuts, however it's likely due to the company experiencing manufacturing faults with their next generation chips, and the resulting postponing of them.

It's not completely clear where all the workers will be fired from, but 320 of them are in Austin, TX, reports We Are Austin.

Strangely enough, shortly after the announcement PC World said that Intel has lost ground this quarter to AMD in the laptop market, with the company growing to 17.6% market share from 13.7% compared to last year. In a market like this, that growth was evidently not enough.

Among those let go, some were senior executives, such as Pat Moorhead, VP, and Product Director Carrell Killebrew.

According to a leaked memo obtained by The Verge, AMD is making the move to "rebalance [their] skillsets" and drive to a more competitive cost structure." AMD officially announced the layoffs with a press release a few hours after the news came out. We've embedded it below;

AMD (NYSE: AMD) today announced a restructuring plan and implementation of operational efficiency initiatives designed to strengthen the company's competitive positioning.  AMD expects that these combined actions will create a more competitive cost structure and rebalance the company's global workforce skillsets, helping AMD to continue delivering industry-leading products while improving productivity, reducing time-to-market and better aligning with key industry trends that are expected to drive growth.
 
"Reducing our cost structure and focusing our global workforce on key growth opportunities will strengthen AMD's competitiveness and allow us to aggressively pursue a balanced set of strategic activities designed to accelerate future growth," said Rory Read, AMD president and CEO. "The actions we are taking are designed to improve our ability to consistently address the needs of our global customer base and stake leadership positions in lower power, emerging markets and the cloud."
 
AMD expects that the restructuring plan will result operational savings, primarily in operating expense, of approximately $10 million in the fourth quarter of 2011 and $118 million in 2012, primarily through a reduction of its global workforce by approximately 10% and the termination of existing contractual commitments. The workforce reduction will occur across all functions globally and is expected to be substantially completed by the end of the first quarter of 2012.   Based on anticipated savings from the restructuring plan, AMD expects fourth quarter 2011 operating expenses will be approximately $610 million.
 
As a result of implementing efficiencies across the company's operations, AMD expects to save approximately $90 million in 2012 operating expenses in addition to the restructuring plan savings, resulting in more than $200 million of expected combined operational savings in 2012. 
 
The company expects to reinvest a significant portion of the savings to fund initiatives designed to accelerate AMD's strategies for lower power, emerging markets, and the cloud. 
 
The company's actions pursuant to the restructuring plan will take place primarily during fourth quarter of 2011, with some restructuring plan activities extending into 2012.  The company currently estimates that it will record restructuring expense in the fourth quarter of 2011 and in 2012 of approximately $101 million and $4 million, respectively.  Of the total restructuring expense, approximately $56 million will be future cash expenditures in 2011, $33 million will be future cash expenditures in 2012 and $15 million will be future cash expenditures in 2013.

 

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AMD's problem isn't *just* Bulldozer's fail compared to i7 - the reality is that Bulldozer can't compete with i5 or i3, either. i5-2500K is basically Kentsfield (Q6600) revisited - fantastic performance, fantastic price (typically $200, if not less, in retail-boxed quantity-one) and - dare I say it - overkill for any sort of mainstream multitasking. Intel "kickbacks" - oh, really? Then explain Intel's success in the BYOPC market - where rebates are offered by retailers or motherboard manufacturers), and where it's been AMD, not Intel, that has been going rebate-heavy. Rebates or not, it *still* comes down to price vs. performance (bang for the proverbial buck, in other words) and when it comes down to CPUs, AMD can't compete in desktops - at all. The GPU market (primarily the old ATI) and the portable market (again, what was ATI is at the center of that) are where AMD's strengths lie - not general-purpose (or even server) CPUs.

I feel sad for AMD. Wish there were more CPU makers, some more interesting competition. AMD is just to weak imo.
I buy what's best, it's not AMD, hasn't been for a long time.

AMD isn't going anywhere anytime soon...

If they got remotely close to real failure we would see Intel bailing them out in some fashion or another. AMD keeps the government off Intel's back as they can pull them out as the token "we have competition" card. That has some serious value to Intel.

AMD will always be in these type of cycles since they severely lack the manufacturing capacity of Intel. They have trouble sourcing OEM contracts due to this and less due to Intel kickbacks. OEMs want to know they can get chips in when they order them and AMD can't ensure that with their capacity levels.

I am sure this was hurt even more when they decided to sell off their factories and no longer manufacture their chips directly...

For the power user/builder like us we can handle supply hiccups, but OEMs don't smile at them.

TruckWEB said,
Intel will be able to do the same thing with ARM real soon.... So they won't need AMD.

Not for a long time. ARM doesn't seem interested in the desktop and server space where Intel and AMD dominate.

nubs said,
What's wrong with bulldozer?

as a basic CPU nothing as competition for Intel's core i7 2600 and i7 2500 CPU's everything and I'm an AMD fan and even I'm not impressed with Bulldozer as always FX should mean high performance not MEH performance

This was bound to happen after all of the hype of the Bulldozer processors...

Heh. They still believe people will be waiting for Windows 8 or are using it now...

Wow this looks like the end of AMD. Bulldozer was their do or die. I would of always used AMD until what happened. We all should of known something was up with such late benchmarks. If it was an Intel killer Benchmarks would of been out months ahead of release.

Honestly, as a consumer, a few hundred for a decidedly better processor is well worth it to me, I normally use a machine for two years minimum, so I normally pick one with the best chip. I understand on a corporate level the cost is a much bigger concern. I don't know if it's AMD slipping the past few years or just INTEL stepping up. I currently run an i7 something in my laptop and it's great. I can also remember a decade ago when the first 500mhz chip was so amazing and came from a company called AMD and it was also great. It kept me in their camp for many years until Intel's dual core came out. Competition is good for everyone in the long run, so I'm still rooting for them.

Hahaiah said,
Honestly, as a consumer, a few hundred for a decidedly better processor is well worth it to me, I normally use a machine for two years minimum, so I normally pick one with the best chip. I understand on a corporate level the cost is a much bigger concern. I don't know if it's AMD slipping the past few years or just INTEL stepping up. I currently run an i7 something in my laptop and it's great. I can also remember a decade ago when the first 500mhz chip was so amazing and came from a company called AMD and it was also great. It kept me in their camp for many years until Intel's dual core came out. Competition is good for everyone in the long run, so I'm still rooting for them.

You are in a very small minority. Most people just don't care about performance because almost any processor today can handle about any applications (i.e. mainstream). It is all about what is the least expensive solution.

azure.sapphire said,

You are in a very small minority. Most people just don't care about performance because almost any processor today can handle about any applications (i.e. mainstream). It is all about what is the least expensive solution.


Yeah. Even Atom can handle basic tasks: web browsing, word, and Full HD video with a 1024x600 res.

If the PC industry was in a "slump", Intel would be affected too. So, since it's not the case, the only logical explication would be lackluster CPU from AMD. The Bulldozer just killed them.

So Intel are publishing higher and higher profits and revenue and AMD is doing the opposite, that's not down to a PC slow down, more down to the fact AMD have slowed down themselves.

No AMD... don't fall please. Your processors are really cost efficient, only Intel extreme fans blame them but actually their performance is more than good enough for gaming... nevermind working.

Arceles said,
No AMD... don't fall please. Your processors are really cost efficient, only Intel extreme fans blame them but actually their performance is more than good enough for gaming... nevermind working.


I've mentioned this in other topics, but I think it's a mistake for AMD to target only the "cost efficient" sector. Keep in mind the Core i7's out on the market today are classed as "mainstream" and that Sandy Bridge-e (Intel's high end offering) will be out before the end of the year. Then if you look at the low end sector, ARM has been dominating there and is getting more and more powerful.

This means AMD is competitive at this small and shrinking sector. if they don't improve the architecture in their cores, they're going to be squeezed out of the business.

CentralDogma said,

I've mentioned this in other topics, but I think it's a mistake for AMD to target only the "cost efficient" sector. Keep in mind the Core i7's out on the market today are classed as "mainstream" and that Sandy Bridge-e (Intel's high end offering) will be out before the end of the year. Then if you look at the low end sector, ARM has been dominating there and is getting more and more powerful.

This means AMD is competitive at this small and shrinking sector. if they don't improve the architecture in their cores, they're going to be squeezed out of the business.

They can't compete with Intel in the high end sector; they don't have any product offerings that /can/ compete. Intel has OEM lock-ins and brand recognition; worse, OEMs don't offer that much of a price drop for going to AMD parts, and even those which do offer AMD parts don't offer a wide selection (why would I ever want to buy an AMD with a sempron in it?).

ARM isn't a threat to the desktop market and AMD isn't competing for the tablet market. ARM will probably never offer any real competition to AMD so long as Windows and OSX are only offered for x86.

The PC industry is in a slump or AMD is in a slump? I only remember hard drive prices skyrocketing, but for an excusable reason... There was something I missed I guess.

KSib said,
The PC industry is in a slump or AMD is in a slump? I only remember hard drive prices skyrocketing, but for an excusable reason... There was something I missed I guess.

It's just AMD. They **** the bed with Bulldozer and are being punished for it now.

Hmm funny the blame doesn't involve the lackluster new CPU lineup eh? Hmmm...

GPU's are selling pretty well though.

Nerd Rage said,
Does that mean their video card drivers will get even worse now? haha

Tch.. I hope not. That mess with Rage was ridiculous.

thealexweb said,

As someone who's had three PCs with AMD processors inside I agree somewhat.


Yeah... I gave up giving them second chances.

ahhell said,

Yeah ok because AMD and iPads are related items.

There are people who contrary to reason believe that the tablet market is competing with and killing off the PC market. *snicker*