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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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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.


“So far we have not seen a single Android device that does not infringe on our patents." -- Microsoft General Counsel Brad Smith

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