AMD Reportedly Preparing Massive Layoff 286
An anonymous reader writes "AMD is preparing to lay off 20 to 30 percent of its workforce after warning of a 10 percent decline in Q3 revenues driven by the weak global economy and PC sales, according to AllThingsD's Arik Hesseldehl. The layoffs will reportedly focus on engineering and sales, and are in addition to a 10 percent headcount reduction 11 months ago. Teams of consultants from McKinsey and Boston Consulting Group are reportedly swarming headquarters to advise the CEO Rory Read, who took over from Dirk Meyer a little over a year ago; several senior executives, including the CFO, have recently departed."
Short term shareholder value (Score:4, Informative)
What do you do when you are trying to maximize short term shareholder value in a distribution based business?
Cut R&D, get rid of sales staff for new markets...
Hit your profit goal, sell stock, get bonus by the time the company goes under you're long gone with your friends at McKinney.
Usually it takes 3 years in hardware for a R&D cut to show in sales figures... Mark it down also mark down the current CEO will be chilling on his new island by that time
Re:How about laying off the consultants instead? (Score:5, Informative)
Early retirement - the perfect recipe for short term savings and long term loss of institutional knowledge!!
Re:How about laying off the consultants instead? (Score:5, Informative)
Remember 10-15 years ago when the AMD chips beat the Intel chips, and forced Intel out of their complacency? With AMD gone where is Intel's motivation to keep the desktop going? Not to mention the graphics part.
You don't have to go back that far. In 2005 I bought an Athlon and it outperformed comparable Pentium 4 Hyperthreading chips. At that time Intel kept upping the clock speed but there was no corresponding increase in performance. My Athlon which was 2.2 ghz (i think) outperformed Pentium 4 HT 3.0 ghz.
It wasn't until Intel came out with the Core2Duo that they began to push AMD aside.
Re:10% decline in quarterly revenues? (Score:5, Informative)
Uh, yeah.
Down 6% in Q1, down 11% in Q2, and they were expected to be down 1% in Q3... instead they were down 10%.
Meanwhile they're not competeing in servers or smartphones, the PC market is shit and it isn't looking like it's going to get any better. Laptops are the one place they're strong, and nobody is optimistic on laptop sales.
It's bleak over there, and believe it or not, they've got a pretty good idea of just how bleak it is.
Re:Not exactly (Score:2, Informative)
No, AMD made some really stupid decisions over the last 10 years or so. Things like over paying for ATI, but they've been able to sell all the chips they've produced.
The problem is that they're still paying off that debt and need to put more money into R&D. I'm not sure what engineers they're allegedly going to be laying off, but I can't imagine them laying off any that are working in R&D.
AMD won't be going out of business any time soon because Intel can't afford the kind of questions that would raise. AMD is pretty much the only reason why there's any meaningful innovation in that particular area of chips.
Last I checked, Intel laptop chips were grossly overpriced and under powered. The laptop I'm using was half the price of the equivalent Intel based laptop and while it doesn't get quite as good battery life, for the price difference I could buy a metric crap ton of batteries for it.
Re:Servers (Score:2, Informative)
Either they overcommitted to OEMs or they simply did not provision enough for people like me. If they were quicker to get the revision out I am sure they could have made up for that 10% drop.
I am an engineer at Intel. I work on core design and engineering of Intel's latest-and-greatest products, and have seen extensive internal reverse engineering work done on AMD products.
It's incredibly hard to just produce "more" of a new product when the process engineering side is not functioning stably, as we believe frequently to be the case for AMD. You'd be amazed how much a fab's ability to pump out silicon is limited by one or two critical pieces, like a lithography tool which is literally unique in the entire world, will cost $50 million to replace, and cannot be had for love or money in less than 3 months lead time.
Re:Byte the bullet & make ARM chips (Score:5, Informative)
Have a foot in both x86 and ARM.
You arent very well informed. AMD doesn't fab processors, so cannot possibly fab ARM processors. AMD is like ARM now and only designs processors, but unlike ARM they do not license the design out (probably they cannot, thanks to IP deals with Intel.)
AMD spun off their fab business in 2009, which is named Global Foundries, divesting their last shares in the company earlier this year.
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Re:10% decline in quarterly revenues? (Score:4, Informative)
The 8150 has many problems, but that's the first time I see anyone complain about its upgrade path. The thing is the 8150 is currently the flagship. Vishera is about to be released for the same AM3+ socket, with modest improvements. If you had an i7 3770k, you'd be complaining about the same thing, unless you went LGA 2011 (then again, if you did and got a $1000 processor, you'd be in a position to make the same complaint again). In fact, you're relatively better off than an i7 2600k owner because Vishera will probably bring a bigger performance improvement over Bulldozer than Ivy brought over Sandy (which, considering how the 8150 performs, isn't exactly impressive).
Re:10% decline in quarterly revenues? (Score:2, Informative)
One nice thing is that AMD doesn't play tricks with features. All of their new CPUs come with IOMMU and AES instructions. With Intel, you have to be very careful what chip you pick. Core i3's for the most part aren't overclockable and don't have AES-NI. Looking for VT-d? Watch out, the overclockable Core i7-3700k doesn't have it, but the non-k version does.
AMD doesn't compete with Intel in the high end anymore, but I think that's okay. There isn't a huge market for the high end anymore. They need to focus on their strengths, which are budget systems that are perfectly fine for more than 80% of the computing population, and their excellent graphics hardware.