AMD cutting 1,400 workers in first move by new CEO

November 3, 2011 By JORDAN ROBERTSON , AP Technology Writer

(AP) -- Advanced Micro Devices Inc. is cutting some 1,400 workers as a weak computer market and manufacturing delays have hurt the world's second-biggest maker of microprocessors for PCs.

The layoffs announced Thursday amount to about 12 percent of the company's 12,000 workers and are the first big move by AMD's new CEO, Rory Read, who was hired from Lenovo Group in August.

AMD is struggling with an industrywide problem: weak PC sales growth, particularly in the U.S. and Europe, which has been anemic because of the economy and competition from smartphones and tablets.

Although PC shipments continue to grow, the pace is slowing sharply. Shipments of PCs rose in the third quarter but at a more sluggish pace than market research firms IDC and Gartner Inc. expected. That has raised concerns about the strength of the market going in to the holiday shopping season.

Most of AMD's business comes from PCs, and it doesn't have a meaningful presence in smartphones and tablets.

Read's job in large part is to help devise a strategy for AMD to penetrate those new computing markets where it and rival Intel Corp. have been largely absent. The battle has taken on a new dimension as AMD's and Intel's market share in PCs has reached a steady balance for years - Intel's chips are in about 80 percent of the world's PCs, and AMD's are in essentially the rest.

But the market for mobile devices is wide open, and AMD and Intel are both weak there. That has hurt AMD more because of its smaller size and was a key reason for AMD's ouster in January of Read's predecessor, Dirk Meyer.

Meyer in some ways had an excuse: He was orchestrating a triage as he tried to manage the company's spinoff of its manufacturing operations while fending off Intel and overseeing the launch of an important new type of chip for AMD. That chip has sophisticated graphics and general processing capabilities on the same piece of silicon, a technical achievement.

Another factor behind Thursday's announcement was that AMD has struggled with manufacturing problems that have postponed the shipment of those new chips, which are called "accelerated processing units."

The layoffs and other unspecified operational changes are expected to save $200 million in 2012.

AMD shares increased 5 cents, or nearly 1 percent, to $5.78 in extended trading Thursday after the cuts were announced.

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astro_optics
Nov 03, 2011

Rank: not rated yet

Why isn't AMD concentration on low power devices and Tablets, as that's where the market is?

kaasinees
Nov 03, 2011

Rank: 4 / 5 (4)

More unemployment great...

AMD shares increased 5 cents, or nearly 1 percent, to $5.78 in extended trading Thursday after the cuts were announced.

Yet again proof of shareholder pressure of laying of jobs.

What the hell is going on.

Drumsk8
Nov 03, 2011

Rank: 3 / 5 (2)

AMD 'IS' concentrating on tablets again another poorly informed writer talking out his ....

Apart from apple which make there own chips all other major tablets use the Tegra chips from AMD in fact the next version is a monster waiting to be unleashed. Cheap tablets are effectively crap and don't even come in the same league as the main players. I am sure AMD's ATI division has seen reasonable sales vs Nvidia they always swap the crown every 6/12 months or so. What has hurt AMD more then anything is that it's Tegra chips aren't used in phones, and their CPU's have lacked in power behind Intel for a long time now. Athlon was it's last Intel killer but unfortunately they've not closed that gap in 5 years now and every body knows it. unless your on a really tight budget would you spend your money on a new computer with a chip that's subpar to the competition? I think not.
Even their new CPU Bulldoser is not as good as the current iCore intel chips the industry knows it.

Drumsk8
Nov 03, 2011

Rank: 3 / 5 (2)

If AMD is to recover they need to not only streamline which is what the new CEO is doing, but they need to seriously go back to the drawing board on their CPU architecture. If they nail it, they will be very popular again, I have very much enjoyed the K7's and Athlons when they kicked ass. Even the new architecture in bulldozer doesn't address very well known issues in it's previous generation phenom X series. If it's only good at a small segment of the market then you've only got a small target audience. Latest benchmarks for the cpu have put gaming performance well under that of the Intel i7's and barely even performs better then their older chips. [ top end bulldozer equates to the i5 series] As to there promise to reach 3.6ghz speed and give 30% performance improvement over their last gen, again they've failed. Stats and performance speak louder then words in a market as cut throat as IT.

Vendicar_Decarian
Nov 03, 2011

Rank: 1.8 / 5 (5)

"I have very much enjoyed the K7's and Athlons when they kicked ass" - Drumsk8

But not now? Has their performance dropped? Or have you simply grown accustomed to throwing away all of the supercomputer compute power of those chips?

210
Nov 03, 2011

Rank: 1 / 5 (1)

And the US Air Force announced MEGA layoffs today...shucks, dagnabit, shoot, heck!

word-

Drumsk8
Nov 03, 2011

Rank: 3.7 / 5 (3)

Vendicar If we didn't need more processing power and extra extensions then why would we need to upgrade as OS's and applications get heaver? I wouldn't dare run windows 7 with the massive amount of multitasking I do every day on a K7 but then a K7 would make a nice little Linux file server or firewall so no it's about it's application and usefulness.

Drumsk8
Nov 03, 2011

Rank: 3 / 5 (2)

Remember the Intel roadmap predictions back at the turn of the century, they estimated that we'd have 10GHz processors in 2011, well my i7 Sandy tops out at 4.9 with water cooling, in fact not many people have there's running past 5.2 max! Processors have become more efficient due to the limiting factors of TDP, bus clocks and variety of other factors (take your pick) improved extensions have a dramatic effect on a processors efficiency to compute AVX now MMX in 96 wow the times fly.

If I was to manage to cluster 10,000 spectrums together in a HPC I still wouldn't be able to run ChromeOS the cpu is only supported by the rest of the system and it's also that which makes a K7 anything but a supercomputer now. Hell even my phone spots 10 times the processing power of a K7

Vendicar_Decarian
Nov 04, 2011

Rank: 2.6 / 5 (5)

"Vendicar If we didn't need more processing power and extra extensions then why would we need to upgrade as OS's and applications get heaver?" -- Drumsk8

You don't. I know people who are still running XP and even 2000.

Modern PC designs are spectacular overkill for most people and that is why CPU performance has more ore less become irrelevant to most people.

Even the slowest PC's are good enough to run the apps that most people use.

Games and video decompression can be an exception depending on what games are bring run and the compute capability of the video chips being used.

Back in the late 80's I projected that CPU clock speeds would stagnate between 1 and 2 Ghz. At the time peons were claiming that clock rates would climb into the hundreds of GHz and beyond. Current clock speeds - without water cooling - top out at around 3.5 Ghz, with most new CPU's being slightly under that.

This situation will not change significantly until silicon is replaced by other materials.

zweistein_2
Nov 04, 2011

Rank: 5 / 5 (1)

Tegra chips are sold by Nvidia and not AMD.
AMD is lacking a lowpower offering. Probably is not trivial for them to do it. Android tablets all have ARM cores and AMD really needs to carve into this market if they want relevance. Now getting rid of 1400 engineers amasses to euthanasia. CEOs have this savior attitude that hurts everybody. This AMD CEO sounds like a tyrant to me and should be eliminated too.

knikiy
Nov 04, 2011

Rank: not rated yet

ARM should buy AMD and put Intel out of business.

antialias_physorg
Nov 04, 2011

Rank: not rated yet

they estimated that we'd have 10GHz processors in 2011, well my i7 Sandy tops out at 4.9 with water cooling

I wouldn't dare run windows 7 with the massive amount of multitasking I do every day

Well, then it's a god thing they're going for multi core rather than for higher GHz values, isn't it? I would suspect that for multitaking multi core architecture is much better than single core/high speed types.

Now getting rid of 1400 engineers amasses to euthanasia.

I'm not sure that these 1400 are all (or even for the most part) engineers (we really should change that term...engineering has precious little with 'engines' to do these days).
But such layoffs will certainly spark the best of them to start looking for alternatives and kill morale for the rest.