vacancies advertise contact news tip The Vault
facebook rss twitter

AMD to lay-off 15 per cent of workforce

by Mark Tyson on 22 October 2012, 09:01

Tags: AMD (NYSE:AMD)

Quick Link: HEXUS.net/qabn3v

Add to My Vault: x

It wasn’t just Google and Microsoft that had a bad Friday. AMD’s Friday was probably the worst of all of them. AMD reported a loss of $157 million for Q3 2012 and announced it will cut its workforce by 15 per cent. AMD shares ended Friday trading nearly 17 per cent lower than they had started the day. Intel also reported its financials earlier last week; suffering a 14 per cent drop in profits, blaming the tablet and smartphone boom.

This will be the second round of jobs cuts at AMD this year. The firm is restructuring to save money as it brings less in. Last year’s Q3 revenue was $1.69 billion, this year $1.27 billion was brought in. Last year the firm made a profit of $97 million, this year it experienced a net loss of $157 million.

GAAP Financial Results

 

 

Q3-12

 

Q2-12

 

Q3-11

Revenue

 

$1.27B

 

$1.41B

 

$1.69B

Operating income (loss)

 

$(131)M

 

$77M

 

$138M

Net income (loss) / Earnings (loss) per share

 

$(157)M/$(0.21)

 

$37M/$0.05

 

$97M/$0.13

 

AMD’s restructuring plan has been accelerated in the face of a faster than expected downturn in the PC industry. Rory Read, AMD president and CEO said “The PC industry is going through a period of very significant change that is impacting both the ecosystem and AMD”. Discussing the pace of change and purpose of restructuring he explained “It is clear that the trends we knew would re-shape the industry are happening at a much faster pace than we anticipated. As a result, we must accelerate our strategic initiatives to position AMD to take advantage of these shifts and put in place a lower cost business model. Our restructuring efforts are designed to simplify our product development cycles, reduce our breakeven point and enable us to fund differentiated product roadmaps and strategic breakaway opportunities.”

The restructuring plan will largely take place in Q4 this year and involves both a reduction in AMD’s global workforce by 15 per cent and site consolidations. The plan is expected to save the company “approximately $190 million in 2013”. Q4 itself is expected to bring a further revenue decrease of about nine per cent.

APUs

AMD’s income wasn’t helped by a write down of $100 million worth of Llano APUs. Due to the weaker-than-expected demand, prices had to be reduced and manufacturing facilities under-utilised. Looking at positives, the company noted the recent launch of Trinity APUs for the desktop channel, and the upcoming introduction of the AMD Z-60 APU in Windows 8 tablets.

GPUs

Revenue from graphics processors was 15 per cent down over the year and income was only $18 million compared to Q2’s $31 million. However, looking at positives again, “AMD continued to expand its industry-leading graphics solutions” including the AMD FirePro products based upon GCN architecture.

AMD revealed that it still has “Cash, cash equivalents and marketable securities balance, including long-term marketable securities, of $1.48 billion at the end of the quarter”. At the end of Q2 it had $1.76 billion in cash... Let us hope that AMD can turn around its fortunes with great new GPU and APU releases before the cash runs out.



HEXUS Forums :: 11 Comments

Login with Forum Account

Don't have an account? Register today!
The PC market has shrunk for the first time in a decade this quarter- looks like we need to welcome our tablet overlords!! :p

OTH,I do wonder if the PC market will pick up once Windows 8 is released.
In response to the above question, I seriously doubt the PC market will ever be the same again. Far too many competing devices, and it's my guess that most people now look to their mobiles devices to achieve much that they previously did with a pc.
The pc is going from an all rounder device to a specific function, if you want a game, you use your portable devices, ps vita, 3ds, iphone, android, tablet, or possibly a ps3 or 360
If you want a communication device, you use your phone, or tablet
If you want to check email or internet, you use a tablet or phone
Only really if you want to do something intensive like burn a disk or video rendering etc do you need a pc/mac
:(

I was hoping for low power APU's to come in to compete with the new Atoms but have far superior graphics. If they're laying off people, those aren't coming any faster.
NickPol
:(

I was hoping for low power APU's to come in to compete with the new Atoms but have far superior graphics. If they're laying off people, those aren't coming any faster.

It seems that is one area they actually are going to put even more focus into:

http://www.xbitlabs.com/news/cpu/display/20121019094022_AMD_Considers_Its_Chances_Outlines_Three_Growth_Opportunities.html

The APU you are talking about is being released in H1 2013:

http://www.xbitlabs.com/news/cpu/display/20121018203506_AMD_Already_Tests_Next_Gen_Low_Power_Kabini_Chip.html

Edit!!

Interesting!! It seems AMD had around 12000 employees at the end of the last year,before they had reduced their workforce by around 10% and now they are upto 11700.