AMD planning another round of cuts

[mrmt]

http://allthingsd.com/20121116/amd-...uding-more-job-cuts/?reflink=ATD_yahoo_ticker

AMD Prepares for January Reorganization, Including More Job Cuts

Having recently laid off about 1,700 people — amounting to nearly 15 percent of its workforce — whispers around the offices at chipmaker Advanced Micro Devices are already focusing on another corporate reorganization that would probably include even more layoffs. (...)

IDC, point for you, they really did a two-stage restructuring.

 

[sontin]

That's not really new. They announced it in their CC that they will do another reorganization in the first half of 2013.

Makes sense because i don't think they could cut the opex by $150 Millions only with a layoff of 1,500...

We continue to evaluate our cost structure and anticipate restructuring actions in the first half of 2013, which will result in additional restructuring charges. However, we are currently unable to quantify these amounts.

 

[mrmt]

That's not really new. They announced it in their CC that they will do another reorganization in the first half of 2013

Restructuring =! Layoffs.

 

[Idontcare]

Really feel sorry for those folks. This is their reward for having incompetent managers. Dirk got how much severance when he walked away from the mess he had set in motion? And that was his reward for destroying thousands of jobs. That ain't right.

 

[blastingcap]

Not entirely Dirk's fault. Hector...

 

[Idontcare]

I thought Dirk was the mastermind behind greenlighting bulldozer?

 

[mrmt]

Really feel sorry for those folks. This is their reward for having incompetent managers. Dirk got how much severance when he walked away from the mess he had set in motion? And that was his reward for destroying thousands of jobs. That ain't right.

Hector got 8.5 million and Dirk got 12 million.

I wonder how much Read and Claflin are stated to earn in their severance.

 

[mrmt]

Not entirely Dirk's fault. Hector...

Ultimate responsibility lies with the later.

Dirk canned the 45nm Bulldozer in 2009, he could canned the entire project there and pursued a different route but instead he gave the Bulldozer guys another chance and here's the results.

 

[ShintaiDK]

I doubt it stops at "2 stages".

 

[postmortemIA]

Every tech company that has no vision for the future is doomed. AMD vision was to play catch up with the intel, and be better in some niche markets.
intel's vision was to make fastest CPUs with low power consumption, and it worked.
nvidia's vision was to expand to mobile and tablet market, and it worked too.

 

[KingFatty]

I blame myself. I'm just too happy paying money for my super-powerful flagship cell phone, and fancy-pants tablet. I should be more miserable using those devices to do all my computing, which would make me more likely to upgrade my personal computer. But no, I just don't need more desktop CPU power because these silly portables take care of almost all my computing needs...

But on a more serious note, I wonder how much the entire CPU market shrinking would have affected AMD, if there was a hypothetical situation where AMD was perfectly competitive with Intel with 50% of CPU market, perhaps AMD would *still* have had to layoff people? Sorry for my ignorance, but I'm just voicing my own personal buying patterns and how in recent years, I've been a very very bad consumer when it comes to purchasing CPUs. I used to be a much bigger consumer of CPUs, not anymore.

 

[ShintaiDK]

PC market shrinked in 2008 too, just to expand rapidly afterwards.

Smartphones only look so good business wise because they replace regular phones. And add a higher ASP. Nobody wants to talk about Nokia, TI etc in business terms. Nokia alone lost something like 135billion$ in value since 2007/2008. From around 40$ in stock value to below 3$ today. Whenever we hear the preach about how good it all is, we are only allowed to hear about Qualcomm, Samsung and Apples success. But Apple is already in trouble and stock losts around 180$ the last 60 days.

Apple seems to be heading into deep trouble on the tablet front:
http://www.channelregister.co.uk/2012/06/08/ipad_sales_fall/

PC shipments in 2015 is expected to be ~100mio higher than in 2012. Just a tad below 500mio.

 

[Phynaz]

Restructuring =! Layoffs.

Nope. Restructuring always results in layoffs.

 

[dud]

How can anything good come of this? If AMD ultimately does go out of business there will be little-to-no competition in the market which will then hurt competition and consumers.

I am planning to complete a build by the end of the year and hope to center it on an AMD processor. I have found that AMD's products are a best value from a price/performance perspective ... you get a lot of bang for your buck.

If anyone disagrees with the last statement please chime in ... and be kind enough to tell me why you disagree.

 

[Sheep221]

How can anything good come of this? If AMD ultimately does go out of business there will be little-to-no competition in the market which will then hurt competition and consumers.

I am planning to complete a build by the end of the year and hope to center it on an AMD processor. I have found that AMD's products are a best value from a price/performance perspective ... you get a lot of bang for your buck.

If anyone disagrees with the last statement please chime in ... and be kind enough to tell me why you disagree.

Although I was hardcore AMD fan, I disagree for following reasons

It has been said many times that diminishing AMD from business won't cause any pricing or development changes from Intel.
Although they are still in business, they are not a competition for intel at least since 2009.

There are solid AMD CPUs out there, but their price/performance/power consumption ratio sux compared to Intel's offerings, AMD is still 2 years behind, the recently introduced FX-8350 oct core is only slightly hitting the performance of the 2 year old i5-2500K which is quad core, again for higher TDP and only similar price, while the FX-8150 at introduction cost $100 more than 2500K. The raw performance is never only thing to consider when buying CPU, if AMD would sell FXes for half of the price of i5s and with lower TDP they would be great products with their performance and overclocking options, however the dark side outweights bright side of them very much.

Early this year I came to need to upgrade my desktop, I sold my 2 old AMD rigs and got Intel i5, it's been great since then.

 

[Idontcare]

Nope. Restructuring always results in layoffs.

The coincidence may be there, but the cause-and-effect isn't really there.

That said, everyone knows that "restructuring" is management-speak for "we will be laying off more folks later on, but we need them for another 3-6 months still and so in the meantime we will just tell them restructuring is in their future, analysts will know what we mean but the employees (most of them anyway) will not see the writing on the wall until it is too late (for them, that is)."

The OP's point was more speaking to the convo's we had a month or so ago regarding our generalized question "when will the other shoe drop" in terms of layoffs because (1) the 15% layoff was not nearly enough for AMD to be expected to hit a break-even point anytime in the near future (1-2yrs) given their revenue predicament, and (2) AMD obviously needs to abandon excavator to focus on ARM and Jaguar based SoCs (per their stated "focus" slides) but they cannot terminate those employees without undermining their own steamroller plans (i.e. delayed but still planned layoffs).

The question is how deep will round 2 be? Another 15%? Probably not that much, maybe just another 5-10%.

 

[Idontcare]

How can anything good come of this?

The good I see from it is the intangible kind - AMD has a lot of talented engineers locked up at the moment working on under-resources hail-mary efforts scattered across a half-dozen "focused priority" projects.

That talent would be far more effective in innovating and bringing products to market for the benefit of the consumers if only they were employed by an employer that has developed effective project management and has resources to properly fund the sort of IC projects that such talent would be better put to use working on.

You can put a lot of college graduates to work plowing a wheat field and harvesting potatoes, and consumers would benefit by not starving...but there are far better uses of the talent and brains of those same people if their management had a vision and a strategy that extended beyond powerpoint and simulations.

Get those talented folks out from under the depressing demoralizing abysmal environment that exists right now in Rory's shadow cast across AMD and put them to work under effective management in other companies (companies who have resources to fund IC design because they have had effective management all along) and that is a solid win for everyone - consumers and employees.

The sooner the ineffective management at AMD put themselves out of business the sooner they can stop holding back innovation, stop holding back talented people who are working with their hands tied behind their backs, and the consumer benefits in ways they cannot imagine (because if they could imagine it then they'd go get an IC design job creating it in the first place ).

 

[KompuKare]

Smartphones only look so good business wise because they replace regular phones. And add a higher ASP. Nobody wants to talk about Nokia, TI etc in business terms. Nokia alone lost something like 135billion$ in value since 2007/2008. From around 40$ in stock value to below 3$ today. Whenever we hear the preach about how good it all is, we are only allowed to hear about Qualcomm, Samsung and Apples success. But Apple is already in trouble and stock losts around 180$ the last 60 days.

Yes, it's easy to think AMD's management is the worst possible of course, but Nokia does put things into perspective. Platform burner Elop might go down as a new word for Trojan Horse. Although a slightly charitable view might acknowledge that Nokia were in trouble before Elop - but was becoming effectively a Microsoft subsidiary the only answer?

 

[Idontcare]

Yes, it's easy to think AMD's management is the worst possible of course, but Nokia does put things into perspective. Platform burner Elop might go down as a new word for Trojan Horse. Although a slightly charitable view might acknowledge that Nokia were in trouble before Elop - but was becoming effectively a Microsoft subsidiary the only answer?

Elop shows why there is no such thing as the company or nation that lasts for 1000yrs.

Eventually some utter moron manages to get promoted by a bunch of other utter morons to a position where they can be the sole fatal decision maker that destroys wealth faster than it was ever created, dooming everyone who had a stake and a future in the business.

Intel's fate is the same as Nokia's fate, someday some moron will become CEO of Intel and they will single-handedly see to its destruction and implosion from within.

Same thing happened to DEC and to HP. It could be said of AMD and Hector as well. This comes in cycles too, for example Fairchild semiconductor had similar fate (employees of Fairchild semiconductor went on to form Intel and AMD, among other companies, in the wake of its demise).

Nokia is proof yet again that man is man's greatest weakness. What thousands of people accomplish in building a great company is merely but one person away from being completely destroyed and gutted. Microsoft will suffer the same fate as well, as will Apple and Google, eventually.

 

[pablo87]

PC market shrinked in 2008 too, just to expand rapidly afterwards.

Smartphones only look so good business wise because they replace regular phones. And add a higher ASP. Nobody wants to talk about Nokia, TI etc in business terms. Nokia alone lost something like 135billion$ in value since 2007/2008. From around 40$ in stock value to below 3$ today. Whenever we hear the preach about how good it all is, we are only allowed to hear about Qualcomm, Samsung and Apples success. But Apple is already in trouble and stock losts around 180$ the last 60 days.

Apple seems to be heading into deep trouble on the tablet front:
http://www.channelregister.co.uk/2012/06/08/ipad_sales_fall/

PC shipments in 2015 is expected to be ~100mio higher than in 2012. Just a tad below 500mio.

That is a delusional view of the PC world.

 

[Ajay]

That is a delusional view of the PC world.

I think that 100 mio growth is predicated on an improved US and Euro economy, in which case, companies in both economic zones may want to upgrade their PCs after ~6 years of malaise. I don't see companies dumping PCs and Notebooks within the next few years. I think there are plenty of old XP systems out there that will like be upgraded to Win7** on new hardware (I think Win8 will fail in the enterprise space). By the end of this decade, it could be a very different story.



** There could be a Win9 OS by 2015, if MS has any sense, that would deliver and updated Aero interface with Win8's underpinnings.

 

[ShintaiDK]

I think that 100 mio growth is predicated on an improved US and Euro economy, in which case, companies in both economic zones may want to upgrade their PCs after ~6 years of malaise. I don't see companies dumping PCs and Notebooks within the next few years. I think there are plenty of old XP systems out there that will like be upgraded to Win7** on new hardware (I think Win8 will fail in the enterprise space). By the end of this decade, it could be a very different story.



** There could be a Win9 OS by 2015, if MS has any sense, that would deliver and updated Aero interface with Win8's underpinnings.

Remember China, India, Brazil, Russia. Its where the growth will be.

 

[ShintaiDK]

That is a delusional view of the PC world.

You most likely chant the same thing as in 2008. Consoles kill PC, now its smartphones and tablets. Guess who always lives on and grows..the PC.

 

[Ajay]

Remember China, India, Brazil, Russia. Its where the growth will be.

Well all of these are going now, but US and EUR are shrinking, so I figured the 2015 projection assumed improved economies for the US and EUR. This is just a guess, I don't have access to the report.

 

[pablo87]

You most likely chant the same thing as in 2008. Consoles kill PC, now its smartphones and tablets. Guess who always lives on and grows..the PC.

No of course not but even if I did, I'd still be on the right track because...only the paranoid survive.

What you are suffering from though is marketing myopia. You assume that PCs equates x86. They do not. Or do you assume PCs equals Windows? Surely you would agree that it does not. PC stands for personal computer. Is a smartphone a personal computer? I think so. Is a tablet? I think so. Is an ARM based chromebook? I think so. They can do almost everything a Wintel PC can do. Not every Windows app works on them but neither do they work on MACs. At the same time there are some great apps that work on these other devices that don't work on Wintel PCs.

The corporate world, I have doubts on as well. I talk to some senior IT types and what they tell me is its all about ubiquity now - accessing data from any device. Makes sense, simplifies their end.

Sure PCs have more horsepower than smartphones and tablets but as PCs are dumbed down, while the ARM vendors continue to innovate, the gap narrows. Combined with the lighter, more innovative OSes vs the bloated Win8...Wintel is ahead but ARM/Android/Apple are catching up (I'll be interested to see how well the acer $199 chromebook does - I think it'll do ok but the battery life and the acer name are sure drawbacks - still I think this is something Intel and AMD (while they're still around) should embrace - its not like Microsoft asked their opinion on their Xbox initiative...

Things always look rosy for everyone during the technology transition periods. I remember floppy drives being 5.25", then 3.5" came along and at one point PCs had both installed - imagine the growth!!, Teac thought the 5.25" 1.2mb FDD would never go away. It did, as did the 3.5" 1.44mb. The # of humans is finite, the # of hours in a day is finite, if I spend less time with device A, it means I spend more with device B because B does more for me. It also means I'll upgrade A less often and I'll want to spend less on the device, I might ditch A all together.

By the way, I never bought in to the console taking over mainly because the hardware is up to standard only once every x years, the rest of the time its behind. Which is an oxymoron given the application.

Lastly, my anecdotal experience on wintel PC demand right now? Bad except for gaming, mobile or desktop, where the kids are definitely buying. Intel wants ultrabook to get down to $699 or less, maybe they should be working on getting the performance of gaming notebooks up and the prices down (its pathetic that a NV 640M (DDR3, not GDDR5) based notebook sells for $1,000+...

another lastly - guess who is the most innovative PC marketer right now? Google.

Nexus 7, then Nexus 10, then the Samsung $249 Chromebook and finally Nexus 4 all generated a lot of genuine PR, good reviews and sold out status because of the feature set and pricepoint. That's a sad indictment of the "PC" business if you ask me.