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The hits keep on coming for AMD

Last week, reports began to swirl around the internet that AMD slashed 5% of its workforce. AMD denied the reports and issued a statement saying, "We did not have a workforce reduction."

It appears that the reports of job cuts were true; however, the size and timing of the layoffs were wrong. According to Information Week, AMD plans to axe off 1,600 employees before the close of September -- this would represent a 10% reduction in AMD's current workforce of 16,000 employees.

The jobs are a necessary move to help lift AMD from the gutter in terms of financial performance. AMD did not disclose which locations or what positions within the company would see the bulk of the workforce reduction.

AMD had a rough 2007 and reported revenues of $1.77B and a $1.722B loss during the closing quarter of the year. 2007 yearly totals saw AMD with $6.012B in revenue and a net loss of $3.379B.

AMD expects that Q1 revenue will come in at roughly $1.5B or 15% lower than Q4 2007 -- the loss came from an unexpected decline in every market that AMD competes.

We will still have to wait a few days longer to hear the full damage report for AMD's Q1 earnings. Despite the already grim forecast, AMD is looking forward to the latter half of the year when it will push its 45nm processors to customers.



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Capital Investments
By Hydrofirex on 4/7/2008 9:43:03 PM , Rating: 2
quote:
an unexpected decline in every market that AMD competes.

And the credit crunch continues... with the R word floating around is it any wonder that businesses and consumers are spending a little less of their discretionary income?

Someone is going to have to buy AMD; they are not doing a good job at competing with Intel. I'm Standing behind my belief IBM would be perfect. Maybe a Sun then? Well, someone is going to buy them if this continues.

Who?

HfX




RE: Capital Investments
By Master Kenobi (blog) on 4/7/2008 9:54:34 PM , Rating: 2
IBM doesn't want to deal with it. AMD does not fit into the IBM business model. Sun is also largely going the same way IBM is in terms of business. Best bet would be either an investment firm.


RE: Capital Investments
By Slappi on 4/7/2008 10:11:26 PM , Rating: 4
If AMD's stock price keeps going down I might buy them.


RE: Capital Investments
By Hydrofirex on 4/7/2008 10:15:40 PM , Rating: 2
I keep hearing that here, but I don't see why any firm with complementary patents and R&D wouldn't jump at the chance to get into the consumer market with an established brand. An investment firm is going to do nothing for AMD. You might as well break it up and sell it piece by piece.

I definitely hear you, but I don't find it to be a compelling argument.

HfX


RE: Capital Investments
By StevoLincolnite on 4/7/2008 10:44:46 PM , Rating: 2
OR allow Via to swallow AMD, Would be perfect they already bought out Cyrix and S3, so why not AMD and ATI?


RE: Capital Investments
By defter on 4/8/2008 2:43:34 AM , Rating: 2
quote:
I keep hearing that here, but I don't see why any firm with complementary patents and R&D wouldn't jump at the chance to get into the consumer market with an established brand.


Because it would be a very expensive chance, if someone buys AMD, they inherit AMD's huge debts, then they need to pour several billions in each year to R&D and new FABs to stay even remotely competitive.

In addition, "getting in the consumer market" means competing directly against Intel and NVidia starting from disadvantageous situation. AMD has already failed this game. Why would AMD fare any better than before if a another company would buy it? The risk/reward ratio of fully acquiring AMD is simply HUGE.

quote:
An investment firm is going to do nothing for AMD. You might as well break it up and sell it piece by piece.


Unfortunately, this seems to be only reasonable alternative. E.g. sell GPU patents/technology to NVidia, sell FABs to some foundry (TSMC, Chartered, IBM) and so on. Then AMD could continue its life as fabless, VIA like, niche CPU designer.


RE: Capital Investments
By eye smite on 4/8/2008 12:20:20 PM , Rating: 2
If someone were to offer to buy AMD, I'm sure they would ask alot more than the current stock prices. They would take a Yahoo type stance and valuate the company on many more things than just the stock prices and it wouldn't exactly be cheap.


RE: Capital Investments
By crystal clear on 4/8/2008 6:50:40 AM , Rating: 3
quote:
An investment firm is going to do nothing for AMD. You might as well break it up and sell it piece by piece


An investment firm brings in a new management team & additional financing.

Thats what AMD needs right now better management & additional financing.

The current management team should be fired-first before any of those AMD employees to be fired, in the near future.

AMD has the best available technology/designs - all just waiting to be implemented.

Do some reading, like the links below-

Inside Barcelona: AMD's Next Generation

Barcelona is the first revision to AMD’s microarchitecture since 2003. Rather than starting from scratch, Barcelona builds on the previous generation and subtly improves almost every aspect of the design. In many ways, this mirrors the evolution of computer architecture – there are very few techniques that can give a large boost on a wide spectrum of applications. Instead, architects are turning to many smaller improvements, just as AMD has done with Barcelona. The only obvious trick left in the bag for AMD is multithreading, which could provide a big boost in a future microarchitecture, such as the K10. However, this style of conservative, consistent design has worked very well for AMD in the past.

Barcelona is a solid improvement across the board and should give AMD momentum across several key markets. The performance advantages will be decisive for HPC applications and MP servers, other areas will be close in performance. Hence, there is quite a bit to look forward to in the near future with the debut and performance numbers for Barcelona. No matter what, AMD's engineering teams deserve kudos for a solidly executed product.



http://www.realworldtech.com/page.cfm?ArticleID=RW...

Inside Nehalem: Intel's Future Processor and System

http://www.realworldtech.com/page.cfm?ArticleID=RW...

After you have done this, you will agree with me.

I would turn AMD into a R&D company focusing exclusively on R&D & license its technology/designs/patents.


There are plenty of profits in such a venture.

As for an Intel competitor-

Competing with Intel in the future is going to be extremely difficult for AMD technically & financially.

Just as there is a R&D alliance of IBM of which AMD is a member,this should be extended to manufacturing & marketing.
That would imply a common architecture/platforms etc.

In short only such a alliance can effectively compete in the future with Intel.

AMD alone cannot do so & eventually collapse.


RE: Capital Investments
By crystal clear on 4/8/2008 6:56:09 AM , Rating: 2
The articles mentioned in the links provided were written
by "David Kanter".


RE: Capital Investments
By eye smite on 4/10/08, Rating: 0
RE: Capital Investments
By MrBlastman on 4/8/2008 9:55:10 AM , Rating: 3
It would be icing on the cake if... Nvidia were to buy AMD.

That would make my day. They have the market cap superiority (though market cap meant nothing in the Sirius -> XM merger) and have demonstrated a far better approach to providing revenue and bottom line growth.

They have weaker sales but that has never stopped anyone. The biggest drawback would be Nvidia owns ATI so that would reduce competition (bad) - but, they bought out 3dfx and treated us with a far superior product afterwards (geforce), so they aren't full of hot air and slash and burn aka EA.

I'd prefer that to VIA any day as VIA has provided me with nothing but displeasure, annoyance and frustration over the years with their motherboard products.

Just another idea to add to the pool.


RE: Capital Investments
By Phynaz on 4/7/2008 10:25:14 PM , Rating: 4
IBM already has an x86 license.

If they wanted to be in the commodity cpu business, they would be.


RE: Capital Investments
By sgtdisturbed47 on 4/8/2008 1:52:27 AM , Rating: 2
AMD is going down, has been going down, and will continue to go down until they either go bankrupt or get bought out. AMD already bought ATI which was on it's own way down for a long time, but since AMD can't compete with Intel or nVidia, it makes perfect sense to can 1,600 employees in order to try to stay in business.

It's as simple as this: you either beat the bigger and better by coming out with something revolutionary, or stay behind and cater to a different niche. AMD already pulled from the enthusiast market by shutout, and now they need to just spend their money more wisely and back off of the high-end gaming market. If they continue to spend money on high-end gaming hardware, they will be bought out or bankrupt in 2 years, guaranteed.


RE: Capital Investments
By teckytech9 on 4/8/2008 1:34:26 PM , Rating: 1
Quite the contrary. There are foreign and domestic interests that won't see the collapse of AMD anytime soon. AMD has a history of launching comebacks, as anyone who has invested in the company knows that. Just look at the stock chart histories.

As for them backing out of the high-end gaming market, is a complete farce, since they invented it in the first place - remember 3DNow? Just wait till the next generation of CPU/GPU's from AMD are released. It follows from their acquisition of ATI, that AMD now has the "know-how" to release these new batches of processors to the market ahead of their competitor. In hindsight, I just think that AMD should have consulted with NVDA first, but now that ATI has been swallowed, a future AMD-IBM-NVDA alliance would be just awesome, if it ever happens.

Now if they can just get that secret gate ingredient mystery solved to speed everything up.


RE: Capital Investments
By crystal clear on 4/8/2008 2:14:49 PM , Rating: 2
Just to update you on something-

Toshiba samples Cell-based HD GPU

Toshiba has begun sampling the graphics chip it hopes will beat Nvidia and AMD at the GPU game: the Cell-derived SpursEngine SE1000.


http://www.reghardware.co.uk/2008/04/08/tosh_sampl...

The IBM alliance is hard at work - no place for Nvidia.


AMD to Slash 1,600 Jobs by Year's End...
By Fnoob on 4/7/2008 9:21:28 PM , Rating: 2
Why not, everyone's doing it.




RE: AMD to Slash 1,600 Jobs by Year's End...
By ImSpartacus on 4/7/2008 9:38:10 PM , Rating: 4
No kidding. Dell comes to mind. Start knifing jobs as soon as you get to numero uno.

At that point you start to question, What is the point? Do we really have to have our stock prices go up every year? Can't we just let those $100k+ big boys take a hit for once? Lord knows, they could use it...

I really do hope AMD gets in the game. Phenom 9*50 isn't bad (at least they can beat a Q6600...), but they aren't over the hill yet.


By Operandi on 4/7/2008 9:44:47 PM , Rating: 2
Phenom is pretty good in its current form. It would have been much better had come earlier and not been botched when it finally did arrive.

But overall Phenom is an example of what AMD can't do if it wants to make it in the long run. They need at least competitive architectures on time and somehow ramp up their manufacturing process and clock speeds.


RE: AMD to Slash 1,600 Jobs by Year's End...
By Hydrofirex on 4/7/08, Rating: -1
By BansheeX on 4/7/2008 10:08:05 PM , Rating: 4
quote:
After all, nothing random happens to people and you should never be imposed on by society


Indeed, cut out the middle man (government waste, the federal reserve) and everyone will be richer, leading to more affordable everything, a competitive market free of special privileges (NAFTA, WTO, HMO act), more jobs, and a rate of charity not seen since the 19th century rather than fighting poverty by creating it with morally repugnant redistribution of wealth schemes that get more useless and unsustainable by the day due to inflation rates intentionally understated by the CPI.

/Libertarian rant
/Reality

BX


By MrBlastman on 4/8/2008 9:58:10 AM , Rating: 1
He he aside from the sarcasm, you could argue where you are born is as random as it gets.

It isn't as if you had a choice in the matter. You do have a choice on what you do with your situation (depending on where you're at of course).


RE: AMD to Slash 1,600 Jobs by Year's End...
By onwisconsin on 4/7/2008 9:54:13 PM , Rating: 2
quote:
Can't we just let those $100k+ big boys take a hit for once? Lord knows, they could use it...


Almost sad when Hector Ruiz gets a 5% raise, AMD is cutting jobs. It's just the nature of the beast; it's just what happens with big companies. Why cut into your earnings when you can cut into someone else's, when you can?


By Grast on 4/8/2008 11:36:29 AM , Rating: 2
Yes it is sad that someone is losing their job. Lay offs are always bad. However if AMD can cut costs and keep the company afloat, that would save 15,000 jobs.

It is also more likely that Hector Ruiz raise was already pre-agreed by the board prior to downturn or part of position package.

My opinion is that raises such as this are not the fault of the person but the ignorance of the board and major stock holders. On the other hand, a 5% raise even if the ammount is in the millions is negligable to company.

If he was an honorable person, Hector should refuse the raise and pass the money on to the employees being layed off in the form of better lay-off packages.

Later..


By Oregonian2 on 4/8/2008 2:56:34 PM , Rating: 2
First of all that raise was reported in error. See "UPDATED" toward the bottom:

http://www.news.com/8301-13579_3-9833743-37.html

As to AMD, job cuts seems almost superfluous see today's EETIMES:

http://www.eetimes.com/news/latest/showArticle.jht...



3...2...1...
By desertvet on 4/7/2008 9:13:29 PM , Rating: 1
Here comes the launch of another FANBOY tirade.




RE: 3...2...1...
By RIPPolaris on 4/7/08, Rating: 0
RE: 3...2...1...
By Inkjammer on 4/7/2008 9:37:39 PM , Rating: 2
It's unfortunate, yeah. AMD and ATI both seem to be having massive issues on the performance side, each getting creamed by their direct opposition. At least ATI's side of the house has been picking up a bit more steam.

Still, I hope it picks for them. Competition is good, and without AMD or ATI it leaves Intel and Nvidia alone in a big ol' playground. And while I love Nvidia, no company should have full run of the court. Bad for all.


RE: 3...2...1...
By AntiV6 on 4/7/2008 9:41:02 PM , Rating: 1
nVidia is doing just fine, thanks for asking. :)

I haven't willingly sold an AMD laptop for a few months because performance isn't near Intel's offerings. The AMD rep. at our store says Puma will help AMD out tons.


RE: 3...2...1...
By Carter642 on 4/7/2008 9:57:34 PM , Rating: 2
hehehe well, of course he'd say that, he IS the AMD rep after all ;)

Seriously though, AMD really needs a win here. At least ATI won big with upcoming laptop graphics.


RE: 3...2...1...
By clnee55 on 4/12/2008 11:44:01 AM , Rating: 2
AMD 1 -2 -3 solutions

1: Have a great idea

2: Pay the big guy big money and lay off the small guys

3: fail


So in hindsight...
By TerranMagistrate on 4/8/2008 3:39:16 AM , Rating: 1
Purchasing ATi probably wasn't the best decision for AMD now was it.

Microsoft ought to reach into its pockets from some change in order to buy AMD and package AMD CPUs with Vista for dirt cheap to all major vendors. Or maybe not.




RE: So in hindsight...
By ThisSpaceForRent on 4/8/2008 8:28:39 AM , Rating: 2
Hehe, can you imagine if Microsoft did that? They'd probably get sued over night for anti-trust violations.

I wouldn't be surprised if Intel pumps some cash into AMD, and starts increasing the prices of their processors. Intel needs AMD (so they have "competition") and by increasing their prices they can push some market share back to AMD.


RE: So in hindsight...
By darkpaw on 4/8/2008 9:43:22 AM , Rating: 2
Reminds me of MS bailing out Apple in the 90s just to save their "competition". I wish they hadn't, Apple woulda been dead and I wouldn't have to listen to the constant whining of the latte sipping computer fashionista crowd.

I'd really be surprised to see Intel bail out AMD though, I'm sure someone will be buying them up for peanuts within the year.


AMD
By adam92682 on 4/8/2008 12:43:45 AM , Rating: 2
I wonder where Cramitpal is now.




RE: AMD
By clnee55 on 4/8/2008 8:24:57 PM , Rating: 2
"I wonder where Cramitpal is now."

He is travelling with Viditor to AMD wonderland.


Another damage report & forecasts
By crystal clear on 4/8/2008 5:52:49 AM , Rating: 2
quote:
We will still have to wait a few days longer to hear the full damage report for AMD's Q1 earnings.


AMD will announce its Q1-08 earnings after market close on Thursday, April 17, 2008.

Intel is scheduled to report results on April 15 and AMD on April 17

Points to note-

1) The DIRTY surprise.....you can look forward to in 2Q 08.

The company expects to take a charge related to the staff cuts in the second quarter, but said it could not estimate the amount at this time.


The above implies- a restructuring charge ,which would be similar(in money terms)to the charge it took in the previous Q for the ATI purchse(disaster).

During the fourth quarter of 2007, AMD reported that it had recorded a $1.6 billion loss related to its acquisition of ATI. In January, CEO Hector Ruiz promised to bring the company back to financial stability by the second half of the year and indicated at the time that he would not cut jobs in order to trim costs.



AMD CEO Hector Ruiz said earlier he expects the company to return to an operating profit in the third quarter of this year, after finishing the second quarter at a near break even.

No way ! with this product line up on 65nm-Too late now.

AMD lags currently lags Intel in chipmaking technology and could be about nine months behind Intel when it introduces 45nm chips & by the time the processor actually ships.....(good luck & keep on waiting).

2) AMD had previously said it expected quarterly revenue to decline in line with seasonality. But it was, in fact, considerably worse than that.

John Spooner, an analyst with Technology Business Research, said the revenue drop is typically five to 10 percent. AMD's 15 percent revenue loss was unusually large and could indicate several problems .

It could mean that AMD did not ship a lot of processors during the quarter or it did ship a fair amount of product but that the ASP (average selling price) of its chips was far lower than expected. Spooner suspects a combination of lower shipments and lower ASPs resulted in AMD's revenue decline.



3) "We blew it and we're very humbled by it and we're going to learn from it and not do that again," Ruiz said.

Every quarter new excuses & promises-people simply dont believe him anymore.

Conclusions-

All promises & expections ! expect another straight year(2008) of losses.




By crystal clear on 4/8/2008 7:01:54 AM , Rating: 2
Sorry for those typing errors-

"All promises & expections !" should read as

"All promises & expectations"


By PAPutzback on 4/8/2008 8:12:26 AM , Rating: 4
The ATI purchase was a a good thing IMO. No other board can come close to the 780G's value. Thanks to the ATI onboard graphics.

And at the price they are sellign their quad core chips these make great gaming machines for the midrange and also great HTPCs.

I can't see why so many people are down on AMD. If everyone keeps talking out their ass about the high end benchmarks and forgetting the bulk of pcs are still oem models with integrated graphics then peole woh don't have a clue about performance per dollar will take your word and go Intel.

If AMD sinks and it won't but if it did then all you Intel fan boys screwed up the timeframe for the release of faster processors. Just like Intel held back faster processors last fall waiting on the AMD Phenom release.

I just hope that if Intel ends up being the only desktop CPU in the future that they get bit by faster game consoles wiping out the desktop gamer.

Add a keyboard and mouse to a console and what do you need a fast desktop for. DVD rips?




amd
By rudolphna on 4/8/2008 8:41:10 AM , Rating: 2
i wouldnt say that they are all bad. I like AMD and would love to see them come back to competetiveness. The one area they can really compete in is pricewise. We just bought a new laptop, our 6 year old Gateway powered by a mobile Pentium-4M just died, and we needed a new one cheap for moving. Solution? Acer Extensa 5420. AMD TurionX2 1.9ghz. Works perfectly, and very fast. For general usage, it is plenty fast. gaming for most people will be good on AMD processors, unless you are one of those peopl ethat sits and watches the Framerate counter the whole time.




RE: amd
By darkpaw on 4/8/2008 9:45:04 AM , Rating: 2
The problem with competing price wise is they are already getting killed on income. Sure they have good competing products at the low end, but they are not making anything on them either. They'd have to make 50% more money then they did last year or cut costs by 50% just to break even!


There's more than one way
By Regs on 4/8/2008 9:30:26 PM , Rating: 2
Don't hire anybody and wait until they quit (no back fill). Of course...they likely been doing this all ready.




RE: There's more than one way
By clnee55 on 4/12/2008 11:47:13 AM , Rating: 2
quote:
Don't hire anybody and wait until they quit (no back fill). Of course...they likely been doing this all ready.


And eventually only the mediocres leave behind. All the talents will fly to other companies


It's time for someone to take AMD's place!
By Serafina on 4/7/08, Rating: 0
By Phynaz on 4/7/2008 10:40:25 PM , Rating: 2
And where exactly is Sony, Toshiba or Panasonic going to get an x86 license?


By StormEffect on 4/7/2008 11:31:25 PM , Rating: 1
Exactly.

At least right now, Cell is a TERRIBLE multipurpose PC processor. It might be powerful, but the compiling system it uses is not anywhere near as popular or easy to use as Intel's x86 stuff.

No no no, unless those companies license x86 or somehow make their processors completely compatible, it is not going to happen.


AMD slips closer to the plug-hole...
By kilkennycat on 4/8/2008 12:18:02 AM , Rating: 1
... and the spin (by Hector and his cronies) gets faster. AMD's huge debt-load makes them a highly undesirable target for any potential angel-investors. As for AMD's roll-out of 45nm processors, Intel's Nehalem should hit them squarely in the gut at exactly the same time. And Nehalem copies everything in AMD's play-book with vastly enhanced capability. If AMD immediately tries to leap-frog Intel by going to a new (to them) 45nm process in concert with a brand-new architecture to compete with Nehalem, heaven help them. There is a multitude of excellent reasons for Intel's 'tic-toc' strategy.




By clnee55 on 4/8/2008 8:28:31 PM , Rating: 2
Last time, AMD beat Intel with the Opteron because Intel slipped, Prescott and Itanium. This time, if AMD want to beat Intel they have to earn it. They have to beat the Core2Duo to get a chance.


Such a shame
By Regs on 5/5/2008 7:22:07 AM , Rating: 2
1600 have to pay for one mans mistakes.




"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997

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