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AMD lays off 10% of staff
Sales have been lower than expected across all of its business segments, says AMD
After denying last month’s rumours that it was laying off 5 per cent of its workforce, it turns out that the truth about AMD’s financial situation is worse than expected. In an official statement today, the chip manufacturer said that it ‘plans to adjust its cost structure by reducing its workforce by approximately 10 percent by the end of the third quarter of 2008.’
According to AMD, the move follows ‘lower than expected sales across all business segments,’ implying that sales of ATI GPUs have disappointing, as well as sales of AMD’s Phenom CPUs. The company said that its approximate $1.5 billion revenue for the first quarter of 2008 was ‘down 15 percent compared to the fourth quarter of 2007,’ and that it had ‘previously anticipated first quarter revenue to decline in line with seasonality.’
Accordingly, AMD said that it also planned to record a ‘restructuring charge,’ meaning the expense incurred by restructuring AMD’s facilities, in the second quarter of 2008. However, AMD said that it’s currently ‘unable to determine the estimated amount of the charge as the details are still being finalised.’
According to The Inquirer, AMD’s Dirk Meyer has sent an internal memo to AMD employees to explain the move. In the memo, Meyer apparently says that ‘headcount reductions are among the last actions we would undertake to help AMD recover and achieve our objectives.’
However, he adds that ‘the unfortunate truth is that we have been unable to grow our revenues to justify our cost structure, and the uncertain environment requires us to adjust our cost structure to match lowered revenue expectations.’ The Inquirer also states that Meyer says the reductions will be ‘determined by a review of employee performance, skill requirements and functional needs.’
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AMD are keeping on 90% of their staff, that impresses me, I mean considering that since the release of c2d they have gone from being the "plucky champions" of the OC world to being the lame also rans in the global cpu/graphics market..... Intell caught AMD napping. They had a performance advantage and when it got swiped from them overnight they panicked, rushed around a bit then bought ATI - which was having a similar crisis with the Nvidia 8xxx series and it's own, rather crippled by comparison 2900xt which when it finally arrived was.....well, a bit rubbish !
Comment by Bobthebuilder at 2:31am 14th April 2008
Well, I'm still running an Athlon 64 4000+ Single Core CPU and a Puiny GeForce 6200LE(MY 7800GTX broke 2 years ago, and I dont have enough right now for a NEW CARD). But when I build my new one this year it'll be AMD all the way, the only thing I thought wasn't a great move was buyin ATUI, cause I liked the AMD/Nvidia N-Forcs partnership a few years ago and, I know things change but I wish it'd come back. You guys are all right about supporting the little guy, Remeber a few years ago, Intel was in the same position, and nobody gave it the kinda slagging AMD is currently getting, Intel ain't gonna dominate the market forever, despite what they think, if AMD go under(heaven forbid PLEASE), THEBN SOMEONE ELSE'LL COME UP TO THE BOXING RING, LOOK AT via AND WHAT THEY'RE DOING, ok NOT A PATCH ON EITHER cpu COMPANY AT THE MINUITE BUT STRANGE THINGS have HAPPENed IN THIS WORLD, AND TGHEY'LL NO DOUBT CONTINUE TO. cHEERS s
Comment by masa20 at 7:50pm 11th April 2008
I think everyone needs to use a little common sense when building their computers. I normally buy whatever parts give me the best performance for the best price. At the moment thats Intel and Nvidia. My current setup is a E6600 Intel processor and a Nvidia 640Mb 8800Gts graphics card. This is the first Intel chip I have ever bought. Back when I first started building computers I've had AMD K5 and k6 processors of various speeds. More recently I've had a Athlon 64 s939 and then a Athlon 64X2. I would never have bought an Intel chip as an AMD chip gave better value for money. Now however I believe that Intel gives the best bang per buck. Everyone is entitled to their own opinion but I think your really only wasting your hard earned money buying AMD at the moment.
Comment by redrage1 at 9:01pm 10th April 2008
I think everyone needs to use a little common sense when building their computers. I normally buy whatever parts give me the best performance for the best price. At the moment thats Intel and Nvidia. My current setup is a E6600 Intel processor and a Nvidia 640Mb 8800Gts graphics card. This is the first Intel chip I have ever bought. Back when I first started building computers I've had AMD K5 and k6 processors of various speeds. More recently I've had a Athlon 64 s939 and then a Athlon 64X2. I would never have bought an Intel chip as an AMD chip gave better value for money. Now however I believe that Intel gives the best bang per buck. Everyone is entitled to their own opinion but I think your really only wasting your hard earned money buying AMD at the moment.
Comment by redrage1 at 9:01pm 10th April 2008
I think everyone needs to use a little common sense when building their computers. I normally buy whatever parts give me the best performance for the best price. At the moment thats Intel and Nvidia. My current setup is a E6600 Intel processor and a Nvidia 640Mb 8800Gts graphics card. This is the first Intel chip I have ever bought. Back when I first started building computers I've had AMD K5 and k6 processors of various speeds. More recently I've had a Athlon 64 s939 and then a Athlon 64X2. I would never have bought an Intel chip as an AMD chip gave better value for money. Now however I believe that Intel gives the best bang per buck. Everyone is entitled to their own opinion but I think your really only wasting your hard earned money buying AMD at the moment.
Comment by redrage1 at 9:01pm 10th April 2008
I think everyone needs to use a little common sense when building their computers. I normally buy whatever parts give me the best performance for the best price. At the moment thats Intel and Nvidia. My current setup is a E6600 Intel processor and a Nvidia 640Mb 8800Gts graphics card. This is the first Intel chip I have ever bought. Back when I first started building computers I've had AMD K5 and k6 processors of various speeds. More recently I've had a Athlon 64 s939 and then a Athlon 64X2. I would never have bought an Intel chip as an AMD chip gave better value for money. Now however I believe that Intel gives the best bang per buck. Everyone is entitled to their own opinion but I think your really only wasting your hard earned money buying AMD at the moment.
Comment by redrage1 at 9:01pm 10th April 2008
I think AmD spend to much on Real Quad core Tech, when Intel said Lets just stick two Duals together giving them a cheaper solution.....and it has bit AMD hard as for the ATI GPU well good card but i feel delayed for to long, not good for Tech heads who want power now etc
Comment by moose19721 at 10:51pm 9th April 2008
First off, my name is Chris, which is ironic. Anyhow, I understand your feelings over being loyal to AMD as I made the move you are just about to make a couple of months ago when I decided to hit the upgrade path. Fully geared up rig of a Phenom 9600, HD3870's in Crossfire along with a 790FX motherboard - it worked, but that's just it, performance was not justified for what I payed for it. Since then - which was around last November - December time I have sold the AMD components and gone back to NVIDIA and for a first for me, Intel - though I still do not like the company. I would say go your own route, but I am urging you too stay clear from them at the moment, ATi's products do not touch NVIDIA at the moment and the same with AMD's to Intel's - apart from the low price sector. With the system I have now I am getting what I paid for.
Comment by C7ouD at 9:10pm 9th April 2008
I dont understand this loyalty business. If AMD are producing an inferior product to the competition for the same amount of money to the consumer then on their head be it. They should make better product. Its as simple as that. I am not an Intel fanboy - I run an Opti 146 - nor am I an AMD fanboy. I will simply spend my money wisely. How stupid are some of you guys.
Comment by pveater at 2:29pm 9th April 2008
What AMD should do is first of all cut back on sponsoring Ferrari, and also cut the prices of the X2 and the Phenom processors to undercut the Intel corparation. I will be getting the 9850 BE and the ATI 3870 when i upgrade my computer as im staying an Loyal ATI/AMD supporter/ user
Comment by chris1989 at 1:24pm 9th April 2008
i was'nt trying to say think like me, what i meant was if a few of you did'nt need the extra power then just go for the AMD setup. so why dont you try and think about what your wallet will look like not too far in the future...
Comment by NikoBellic at 10:00am 9th April 2008
Er.... 'they managed' was a double type. Its early you know! And i missed the decimal from the $1.5 billion. Still.... my point is valid.
Comment by pveater at 7:57am 9th April 2008
In your original post you said maybe more people should think like you. Well thats just palin stupid. Im not going to buy an inferior product for the same amount of money just so AMD can generate more than the paltry $15 billion they managed they managed in the last 3 months!!!
Comment by pveater at 7:49am 9th April 2008
I must reply to Nikobellic, It sounds like the components you list are a recent purchase. Who really is going to spend a large amount of money on something they know is second rate. Common sense says buy the best that your budget allows or work out the cheapest setup that fits the need. What happens when you need more performance for future games or applications. All this says Intel. There are dozens of deserving charities that need money before AMD. I used to by Athlon XP's and Athlon 64 because they had the best performance for the price. Would I have spent loads more money for Intel stuff just because they were going through a bad patch at that time, no way ever.
Comment by wilfy at 7:19am 9th April 2008
Its common for companies to cut back on staff to reduce their operating costs. Even at times when they aren't doing as well as previous years. The parent company who own the company i work for are the same. Constantly hiring and firing depending on how well we are doing. AMD wont go under, nor ATI. They may not be doing great at the moment but they should recover. The big difference would be how they recover. The 2 options, after some cut backs and a bit of a reshuffle that they sort themselves out and get back to making decent products. Or they bought out. I would put my money on the latter and the company i would expect to be the contender to purchase them are Samsung. Rumor has it that Nvidia would be the company to buy out AMD but in all honesty what can AMD give Nvidia that they dont have already? They can already design and manufacture micro processers and they already are a graphics manufactuer. All they can offer is an expansion to their manufacturing volume. This would also conflict with certian rules on competion. My bet, would be Samsung who would be an ideal major player who would greatly benfit from what AMD have to offer. And AMD would fit nicely into Samsungs organisation. I must admit although ideal, i doubt AMD is anywhere near the point of sale, nor in as much trouble as we all believe. Ultimately it is only for the consumers benefit(i.e. all us guys) that AMD continue to do what they are doing and after these cut backs use the funds in R&D to help them get back on track. So i wouldnt start panicing just yet guys!
Comment by connectionlost at 9:59pm 8th April 2008
Its common for companies to cut back on staff to reduce their operating costs. Even at times when they aren't doing as well as previous years. The parent company who own the company i work for are the same. Constantly hiring and firing depending on how well we are doing. AMD wont go under, nor ATI. They may not be doing great at the moment but they should recover. The big difference would be how they recover. The 2 options, after some cut backs and a bit of a reshuffle that they sort themselves out and get back to making decent products. Or they bought out. I would put my money on the latter and the company i would expect to be the contender to purchase them are Samsung. Rumor has it that Nvidia would be the company to buy out AMD but in all honesty what can AMD give Nvidia that they dont have already? They can already design and manufacture micro processers and they already are a graphics manufactuer. All they can offer is an expansion to their manufacturing volume. This would also conflict with certian rules on competion. My bet, would be Samsung who would be an ideal major player who would greatly benfit from what AMD have to offer. And AMD would fit nicely into Samsungs organisation. I must admit although ideal, i doubt AMD is anywhere near the point of sale, nor in as much trouble as we all believe. Ultimately it is only for the consumers benefit(i.e. all us guys) that AMD continue to do what they are doing and after these cut backs use the funds in R&D to help them get back on track. So i wouldnt start panicing just yet guys!
Comment by connectionlost at 9:59pm 8th April 2008
I'm sorry but I can't think of anything. CPU's have come out late and over priced or underachieving on tests against Intel. GFX midrange not bad performance but beaten by 8800GT which is also cheaper. Yes, their quad core is truely four single cores but who cares if they are come out expensive and run slugish. If they have been holding back anything in R&D, they need to get it out now ahead of the competition but only if it's good.
Comment by crazyceo at 10:08pm 8th April 2008
in July last year, AMD shares were around $15 - from Sept-Dec they fell from $14 to $6 where they've stayed since then...I don't think this has to do with "seasonal" issues, I think the fact Barcalona hasn't lived up to it's own hype and possibly even the TLb fiasco have done alot of damage to the company and shareholders are refusing more investment.
Comment by EdArch at 8:30pm 8th April 2008
‘determined by a review of employee performance, skill requirements and functional needs.’ Well they could start by sacking the people who decided "let's give the phenom hardly any cache and make it not as overclockable as it should be" and the people who said "let's just follow Intel to 45nm instead of jumping ahead of them and making all our chips 45nm/36nm/24/nm" That should be a good start. I agree with I48X that there could be a smell of complacency here, no drive, no "let's see how far we can really push things forward" I think their first (bad) move was throwing out s939 and going to sAM2, either AM2 should've been developed instead of s939 or 939 should've had a longer shelf life and the various refinements that come with it. second was buying ATi & third was the things I said at the beginning of the post. As for remaining an AMD customer, I not long ago bought a 5000BE and I intend to buy a BE phenom at somepoint in the next few months. However I have preference for nVidia graphics (I have a 512Mb and 1Gb 8800GT) and chipsets (and I think the Hybrid SLI used on the upcoming 750a AM2 boards are extremely good money-savers in terms of operating costs - as well as possibly adding a longer life to my graphics cards! Maybe AMD will be using this to get rid of people who have made bad decisions but it's usually the guy on the shop floor who gets sent packing, never management. Maybe if some CPC readers who favour AMD/ATi products were to each buy a couple of shares in the company then ideas could be put across the table...
Comment by EdArch at 8:11pm 8th April 2008
This is frightning stuff. We all know if AMD go under taking what used to be ATI with them we will soon find the cost of Intel and Nvidia products on the rise as the quality drops. Before we know it the prices will be creeping up and there will be nothing we can do about it. I hope AMD gets its act together and sharpish.
Comment by mercinarynurse at 7:21pm 8th April 2008
This is frightning stuff. We all know if AMD go under taking what used to be ATI with them we will soon find the cost of Intel and Nvidia products on the rise as the quality drops. Before we know it the prices will be creeping up and there will be nothing we can do about it. I hope AMD gets its act together and sharpish.
Comment by mercinarynurse at 7:21pm 8th April 2008
I feel nothing for AMD. I do hope they manage to overcome this for the good of the market but if they don't they only have themselves to blame. They had the opportunity to take the fight well and truly to Intel but sat back with a beer and a cigar.
Comment by _i48X_ at 6:59pm 8th April 2008
I can understand peoples comments about why AMD should survive and the ramifications of its failure to do so. HOWEVER, what were they doing for the X amount of years that they were ahead of Intel in the Cpu wars. They were being complacent, and it now has turned round and bit them in the A**E!. Why did they not use the profits wisely,buying a GPU manufacturer was truly the last nail in the coffin. I really do hope they bounce back, but if they want to it will have to be truly monumental.
Comment by typhoon1377 at 6:48pm 8th April 2008
I hope they survive long enough to make some decent stuff, to see two former hardware greats fold is a real knock. I don't want to see Nvidia the sole high end GOU manufacturer or Intel make everything including kitching sinks.
Comment by DudQuitter at 6:01pm 8th April 2008
the reason for this is due to hardly any people buying AMDs products and i said on here before i am sticking with AMD products until we can safely say that the competition is back, i bet your all thinking but why would you buy slower hardware, well thats bacause i dont require the fastest and this may help get competition back, and you may have noticed Nvidia only decided to bring out new GPUs now that AMDs 3870x2 caught up on performance... anyway just to let you know, my hardware consist of, AMD Phenom 9600 Black Edition, ATI RADEON HD 3870, Gigabyte GA-MA770-DS3 (AM2+)(770 Chipset)... now you may notice i am not after the fastest setup out there because i only have the 770 chipset and not the 790FX extreme overclockers chipset, so maybe if a few more people think like me then maybe AMD will get back up and then Nvidia and Intel will start to release new products.
Comment by NikoBellic at 5:08pm 8th April 2008
Lets all rush out and buy a 3870x2 and phenom processor, help these people..
Comment by glen290 at 4:55pm 8th April 2008
It is a real shame, I really hope they manage to dig their way out of this hole. At least they are taking actions to decrease the cost.
Comment by jonisaksson at 4:42pm 8th April 2008
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