AMD layoffs

[ikachu]

Err sorry I meant "AMD Optimizes Cost Structure to Enhance Competitiveness and Accelerate Growth"...

http://finance.yahoo.com/news/AMD-Optimizes-Cost-Structure-iw-3017489825.html?x=0

 

[drizek]

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.

Translation:

AMD surrenders performance segment to Intel, decides to compete against VIA in third world countries.

 

[Barfo]

Because less engineers = more performance right?

 

[drizek]

Because less engineers = more performance right?

AMD has a higher ratio of cores to engineers than any other CPU manufacturer.

 

[notty22]

Translation:

AMD surrenders performance segment to Intel, decides to compete against VIA in third world countries.

LOL, I had the exact sentence quoted for a response. That says it all.
Expecting to save 10 million in the next quarter alone from this move, translates to me, less people working on the next FX cpu.

 

[Vesku]

Hopefully they trim some of the top, their operating expenses seem awfully high. I compared them to Intel recently 1/7th the revenue 1/20th the profit, some of that missing profit is lower ASP but some is higher overhead.

Seems pretty clear they are indeed ceding the performance market to Intel, though. Stated focus on Trinity and not FX v2.

 

[RussianSensation]

That's a nice "Holiday" present for the unfortunate 10% of employees that are simply victims of poor management and higher-end design decisions. I am pretty sure there is almost no talented engineers left at AMD at this point. All the best ones probably abandoned it for ARM, Nvidia, Intel, etc.

I esp. like this quote:"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."

How is laying off people going to improve their productivity (unless those 10% were getting paid for sitting in the office?) or reducing time-to-market?

Another quote: "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."

^ Basically, AMD is becoming more open about the fact that they have no intentions whatsoever to compete on the high-end desktop market. This is probably why Dirk and the board had a disagreement - they wanted AMD to stop focusing on desktop CPUs and go for mobile/tablet/lower power/lower end devices. It makes sense from a business perspective since this is where the market growth is going to be in the next 5 years. However, for us enthusiasts, this isn't great news.

 

[3DVagabond]

Err sorry I meant "AMD Optimizes Cost Structure to Enhance Competitiveness and Accelerate Growth"...

http://finance.yahoo.com/news/AMD-Optimizes-Cost-Structure-iw-3017489825.html?x=0

New CEO. This is not at unusual.

Because less engineers = more performance right?

If BD is the best thing their engineers could design, who needs them? I know everyone likes to blame management when stuff fails and give full credit to the engineers when it's successful, but with something this bad there's plenty of blame to go around.

 

[Texashiker]

AMD has given up?

Is this the best they can come up with?

 

[RussianSensation]

If BD is the best thing their engineers could design, who needs them? I know everyone likes to blame management when stuff fails and give full credit to the engineers when it's successful, but with something this bad there's plenty of blame to go around.

I don't think people give credit only to engineers when the product is successful. It's understood that it's a team effort. But in this particular situation, let's say 5-6 key guys at the top decided on BD design and then probably 5,000 people worked on it. If the original idea is flawed to begin with, you can throw 5, 10, 25, 50k people on it, and it will still flop. I really don't see at all how you can blame the regular employees here. BD's fundamental seed design of 8 shared cores was simply the wrong decision to begin with. I am pretty sure that the people being laid off now had no input towards that key decision made 4-5 years ago. Also, a CPU is not like a magical phone or iPad that you can "feel" in your hands or show to your friends. So even the marketing team can't polish this turd.

 

[Vesku]

Actually, RussianSensation, most of the things that make FX bad are related to the current state of GF 32nm process. AMD did drop the ball regarding IPC, but it is two other factors combining with that (Hot and failing to meet frequency goals) that combine to create a mediocre FX product.

They spun off Global Foundries, so they don't have much direct control over how the 32nm process is improved. I would love to hear the story of how Bulldozer ended up meeting it's design efficiency goals while missing IPC targets, unless those targets were just external bluffing. IMO, most trimming should be done in less critical areas. They should be actively looking for more engineering talent.

Edit: But then again they are pretty much saying it's become too hard to compete in the performance x86 market. So perhaps they do not need more engineers, just quicker deployment from concept to silicon.

 

[Elixer]

Hmm... well, I would start with the marketing guys.
Epic fail on their end.

 

[vshah]

AMD has a higher ratio of cores to engineers than any other CPU manufacturer.

and look how well they've been doing

 

[exar333]

10% of the workforce could mean a LOT of different things. Engineers and QC guys who work on an actual CPU do not represent all (or even most) of the workforce. You could likely trim 20-25% of the workforce and potentially leave the engineers and 'doers' intact. That doesn't mean that areas suffer though...

It remains to be seen what employees are cut, and what divisions are impacted the most. I agree with some others though, if they are not performaning, then cleaing a little house and replacing with better could be a good thing.

 

[3DVagabond]

I don't think people give credit only to engineers when the product is successful. It's understood that it's a team effort. But in this particular situation, let's say 5-6 key guys at the top decided on BD design and then probably 5,000 people worked on it. If the original idea is flawed to begin with, you can throw 5, 10, 25, 50k people on it, and it will still flop. I really don't see at all how you can blame the regular employees here. BD's fundamental seed design of 8 shared cores was simply the wrong decision to begin with. I am pretty sure that the people being laid off now had no input towards that key decision made 4-5 years ago. Also, a CPU is not like a magical phone or iPad that you can "feel" in your hands or show to your friends. So even the marketing team can't polish this turd.

When a team fails the coach gets fired, as (s)he should. I'm just saying you need to look at the players too and make changes.

Here's a bit of an off the wall example, but it shows my position. Take the New England Patriots. Before Brady was QB they were terrible. Belichick was still the coach, same game plan, etc. Bledsoe gets injured, Brady comes in, they instantly become the best team in football and now Belichick is a genius.

 

[piesquared]

lol at all the chicken little investors around here.

 

[mosox]

How is laying off people going to improve their productivity (unless those 10% were getting paid for sitting in the office?) or reducing time-to-market?

In any big organization there are loads of useless employees. In the state-run organizations (Govt agencies, etc) they could do just as well with half the number of people.

So don't worry, they won't touch the R&D who came up with an unprecedented 3 (three) platforms this year (Brazos, Llano, Bulldozer), two of them successful, so very probably it's about the well known marketing/sales/accountability bureaucrats who somehow get to take over any engineering/production enterprise and run it into the ground.

For the US firms throw in the Political Correctness - people hired or promoted solely because of their race (minorities) gender (women) etc. But AMD won't touch those anyway.

The Challenger shuttle disaster was caused by stupid managers who couldn't grasp the basics of the technology:

A senior Thiokol vice president, states that “we have to make a management decision. “ The engineers presented their views once again, but the final decision was made by the four senior managers present with one reluctant manager told to “take off his engineering hat and put on his management hat.” All four Thiokol managers then voted to go against their initial engineering decision and agree to the launch.

http://aneconomyofmeaning.wordpress.com/2011/01/29/ineffective-meeting-leads-to-challenger-launch/

That's your average technical company.

 

[GrumpyMan]

They can just overclock the engineers that they will have left to get the job done.

 

[cbn]

Translation:

AMD surrenders performance segment to Intel, decides to compete against VIA in third world countries.

Bobcat in an Android Tablet for the third world?

Why????

It makes sense to me that AMD has the product line-up already established for:

1. Virtualized Servers: Bulldozer
2. Entry level and Mainstream x86: Fusion APU

But where is AMD's Presence in these categories:

1. Physicalized Servers
2. Smartphones<----I can see real potential here for the emerging markets and even some Green Minded folks when the re-usable lap docks start emerging (which is inevitable) In fact, for some people I could see a Re-useable lapdock more being desireable than buying a higher end x86 processor connected to a cheap display on custom laptop chassis. Most peoples don't want buy a new display for their new Tower PC....why shouldn't laptop displays be economical in the same way?

 

[Qianglong]

Icrontic has a partial list of affected employees:
http://tech.icrontic.com/news/the-axe-falls-at-amd-as-layoffs-sweep-through-the-company/

Xbitlabs also hints at new "strategy" and more "consumer oriented" device and I really wonder what that means.

http://www.xbitlabs.com/news/other/...ces_Set_to_Unveil_New_Strategy_Next_Week.html

 

[RussianSensation]

"It&#8217;s worth wondering if AMD might also now be shifting its focus to the lower-power architecture designed by ARM Holdings Plc ARMH -0.28&#37; , the dominant chip architecture in mobile phones and tablet computers, compared with the x86 architecture currently used in most of AMD&#8217;s chips.

When asked on his first earnings call with analysts whether AMD would develop a chip for tablets, Read said, &#8220;Thin and light, convergence, consumerization, those are core trends. They&#8217;re not going to change,&#8221; he said &#8220;We&#8217;re listening to the customer. We want to focus on what that customer needs.&#8221;"

http://www.marketwatch.com/story/amd-chief-may-have-picked-his-strategy-2011-11-03?siteid=yhoof

Yup, most consumers now could care less about a $200-300 desktop CPU that beats SB. This might signal a major change for AMD which has limited resources and probably can't develop great mobile/tablet chips AND awesome desktop CPUs at the same time. Looks like the era of competitive desktop AMD is coming to end.

 

[Jovec]

In any big organization there are loads of useless employees.

^^

 

[Idontcare]

In any big organization there are loads of useless employees.

^^

View it as a form of private-sector welfare.

The productive citizens of society are always going to be supporting the unproductive ones, be it by paying higher prices for the products you buy so that the company selling those products can keep their existing unproductive employees on the payroll or be it by paying higher taxes to support the government programs that are instituted to assist the unemployed.

 

[gevorg]

The investors seems happy, AMD is up 5% today.

 

[cbn]

"It&#8217;s worth wondering if AMD might also now be shifting its focus to the lower-power architecture designed by ARM Holdings Plc ARMH -0.28&#37; , the dominant chip architecture in mobile phones and tablet computers, compared with the x86 architecture currently used in most of AMD&#8217;s chips.

When asked on his first earnings call with analysts whether AMD would develop a chip for tablets, Read said, &#8220;Thin and light, convergence, consumerization, those are core trends. They&#8217;re not going to change,&#8221; he said &#8220;We&#8217;re listening to the customer. We want to focus on what that customer needs.&#8221;"

http://www.marketwatch.com/story/amd-chief-may-have-picked-his-strategy-2011-11-03?siteid=yhoof

&#8220;Do we have the right engineering talent, do we have sales/marketing folks in appropriate geographies, etc. If not, we need to get the right people,&#8221; said Drew Prairie, an AMD spokesman.

With Rory Read coming from Lenovo, my bet is he is referring to a shift to Asia.

This would be very ambitious.

I wonder how long till we hear about the AMD-ARM Alliance? What CPUs will they choose and how will they design the SOCs?