Quick Note: AMD To Trim Workforce by 10%, Expects $200M Operational Savings
November 3, 2011 9:35 PM
comment(s) - last by
"Good luck with your layoffs, all right? I hope your firings go really well."
In August, AMD announced that it was getting making former Lenovo President and COO Rory Read its
new President and CEO
. At the end of October, AMD announced that its net income of $97 million was
constrained by yield issues with its 32nm manufacturing process
Now the company has announced that it will axe 10 percent of its global workforce as a part of a new restructuring plan that will eventually save $200 million in operational expenses for calendar year 2012. AMD also plans to sever some of its contractual obligations to save money.
"Reducing our cost structure and focusing our global workforce on key growth opportunities will strengthen AMD's competitiveness and allow us to aggressively pursue a balanced set of strategic activities designed to accelerate future growth," said Read.
The restructuring plan will also allow AMD to focus more on cloud computing, emerging markets, and low-power systems. The focus on lower power consumption is a key as companies like HP are
now looking to low-power ARM architecture
for upcoming server products, which could spell trouble for traditional x86 processor manufacturers like AMD and Intel.
This article is over a month old, voting and posting comments is disabled
11/4/2011 10:09:10 AM
It is so much easier to just fire and hire new people instead of spending the same severance pay on re-training your existing engineers. In addition, an 11% RIF greatly enhances loyalty from your remaining work force. /sarcasm off/
Seen this movie before - after a 10+% RIF, whoever was not let go will look around, and jump ship if given an opportunity to do so. Without the RIF, a lot less people would even dream of looking for other positions. And the people who leave, are usually your best performers, not the next in line at the bottom of the barrel, as they are the ones asked to pick up extra work for no extra pay and reduced job security, and have the best chances of finding another job.
AMD already has some nice products - their APUs are in very high demand, and there is a reason for it. So, instead of focusing on what works (like fixing performance issues in "Bull-dozer" CPUs and further improving the APUs, maybe adding ECC memory support to their video engines so they have a better chance of catching up with NVIDIA in HPC applications), they want to go chase a low margin, already crowded market, in which they have no prior experience, like ARM. BRILLIANT! I can now see that the new CEO is really earning his pay....
Re ARM-64 servers - they look more like a solution looking for a problem, given the current state of virtualization and capability of moving workloads on demand across physical nodes, then a highly desirable, high growth and high profit margin market. They will certainly find some buyers, but percentage wise, compared to Xeon or Opteron based servers, I doubt they will amount to much. You need a very compelling $$$ argument for a new architecture, and for ARM servers, cost savings are questionable imho - the delta in CPU cost is a very small number compared to the total hw and sw cost associated with a new server, and power savings are largely negated by the advances in virtualization, given the delta in processing power between ARM and Xeon / Opteron CPUs. When/if you can consolidate 3-5 ARM servers on a single Xeon / Opteron server, I highly doubt there are any price or operating energy savings, and you have less possible points of failure.
I really like AMD, and used their CPUs in all my home computers for 20 years (since their 286 CPUs), but I am highly skeptical of this new direction. They may loose focus as their best people will be shifted away from core products to chase money-loosing propositions dreamed up by marketing drones and a new CEO eager to show that he is "doing something to fix the company" (clue - AMD is not a dog or a cat, and "fixing it" may require a different set of skills). Letting people go after they managed to turn around the company and have a couple of positive quarters in a row is the wrong message to send to the rank and file...
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