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AMD announces plans to toss out its dead weight.

The news coming out of AMD hasn't been on the most positive note in the past few weeks. The company announced in early April that it will cut 1,600 jobs by the end of 2008 representing 10% of its workforce. The reason for the cuts came as a result of steep declines in every business arena that AMD competes.

Four days later, the company's Chief Technology Officer, Phil Hester, stepped down from the company with no replacement in sight.

Today, AMD released even more unsettling news in the form of its Q1 2008 earnings report. As previously forecasted by AMD, revenue fell 15% from the previous quarter to $1.505B and the company experienced a net loss of $358M. Operating losses totaled $264M and the company faced a charge of $50M due to its 2006 acquisition of ATI.

"A seasonally weak first quarter was amplified by a challenging economic environment for consumers and lower than expected revenues of previous generation products, resulting in lower than expected revenues in all business segments," said AMD CFO Robert J. Rivet. "However, we are encouraged by the market acceptance of our Quad-Core AMD Opteron server processors as well as our new chipset and graphics offerings."

After experiencing an entire year of losses, AMD is now looking to restructure its business. The company will now put all of its divisions under the microscope and make the decision to sell off some of its underperforming units in order to become profitable in the second half of 2008.

"It is clear that our business environment has changed from just the second half of last year when we saw some of our non-core businesses on a path to growth and profitability. That is now questionable," said AMD CEO Hector Ruiz.

"As a result, we are embarking on a significant restructuring of our company to address the following: We need to intensely scrutinize all of our businesses in order to ensure that our core x86 and graphics products are on a healthy path to leadership and profitability," Ruiz continued. "We also need to scrutinize our non-core business and see how they fit into our plans toward growth and profitability."

AMD's consumer electronics division could be a prime target for cuts according to Technology Business Research analyst John Spooner. "It makes sense because it's not a core part of their business, and they can’t really afford to focus on consumer electronics at this point," said Spooner. They need to focus on processors for PCs and servers as well as graphics."

AMD is indeed ramping up to unleash a new wave of processors and graphics cards for consumers. As reported yesterday DailyTech, AMD is working on its quad-core 45nm Shanghai processor architecture along with its 6-core and 12-core variants.

On the graphics front, AMD is preparing for the launch of its successor to the Radeon 3850/3870 graphics processors. Radeon graphics processors based on the new RV770 core are expected to debut under the $300 price point.

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RE: No Sympathy Whatsoever..
By TETRONG on 4/18/2008 1:23:38 PM , Rating: 0
Lets not forget that this is a very cyclical industry.

Intel is riding high on the hog, but they're definitely starting to show signs of stagnation again.
As evidenced by their deviation from their very own "tick, tock" schedule.
If it weren't for the tech consortium aligned with IBM we wouldn't be seeing Nehalem this year, and they would stay at 45nm until 2011.

AMD had hyperconnect and on-die memory controllers what 2-3 years in advance of Intel? Who gave us 64 bit processors? Who gave us true dual-core?
Intel simply copies AMD first-mover strategic/tech decisions, then when they need a bailout they prostrate in front of their Israeli design team who is severely overworked, underpaid, under.....etc, etc....

I got other news for you too-
As soon as Intel tries to pull some shit with Apple "Oh, the markets shrinking, and you're doing so well, can't you spare a little more?"
Yeah, right it's gonna go a little more like this.
"Hey Stevie we're your exclusive supplier, so you're screwed."

Then Stevie Wonders gonna open up a can of whoop-ass by announcing that they're going to begin offering 4G Iphonebooks with a 22nm AMD CPU/graphics card combo.
"X86 is X86, and cigar is a cigar, and I'm retiring to Monaco."

Blahblahblah and Hitler defeats the Allies so on and so forth.

In all seriousness I believe we have yet to see the results of ATI integrating with AMD combined with the magic of a process shrink.
Whatever they're cooking against Larrabee, Cell2, Sun, VIA, etc... is going to have very sharp fangs to display at the companies death knell.

All of the above are simply my own malformed opinions proffered for your mild amusement and shouldn't be taken too literally.

"I'd be pissed too, but you didn't have to go all Minority Report on his ass!" -- Jon Stewart on police raiding Gizmodo editor Jason Chen's home

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