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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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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"


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