The future market for GPUs is not a bunch of gaming enthusiasts and the design cycle for new devices takes sometimes years. The future is in tablets, phones, TVs, and other connected devices. Having a GPU that fits in a smartphone is more important than having insanely good rendering performance. Having a GPU that draws little power and does not need three fans and a big heat sink is crucial.
AMD's marketing team made a colossal branding mistake by killing the ATI brand when millions and millions of gaming devices were sitting in people's living room with little red stickers on them and on the splash screen. ATI had become a household name thanks to the Will. ATI was a much more recognizable brand than AMD ever was. When you add together the amount of change in the GPU market (desktop down, small device up)
My guess is senior management did not like the fundamental marketing strategy and wanted to change the direction. After marketers lock in to a branding strategy, it's very hard to get them to change direction, just like it's really hard to get a Java development team to port their product to Lisp, Add to that the sea change in who is buying GPUs and what devices they go in, and you have a situation where AMD needs to totally reposition.
To everyone here who is saying marketing people are not as important as the engineers, I believe that you are talking about a chicken and egg problem. To succeed in the market, you have to have a product people want (good engineering) and the marketing make sure that the appropriate level of demand develops in the marketplace. Marketers do a lot more than hang around the coffee pot wearing black turtlenecks and discuss the merits of sumatra vs. colombian coffee.