Print 38 comment(s) - last by crystal clear.. on May 15 at 1:05 AM

AMD announces the job cuts after a brutal Q1 earnings announcement

After confirming it had to reduce expenses, AMD recently announced that it will cut 430 jobs worldwide, which is 2.6% of its workforce.  Around 40 jobs will be cut in AMD's Sunnyvale and Santa Clara, CA offices; 80 jobs in Austin, TX; around 12 in Boston, MA; and 50 in Markham, Ontario.  No workers in Dresden, Germany, location of AMD chip-making facilities, will be laid off. 

The remainder of the job cuts will be spread throughout AMD offices and manufacturing locations around the world.  Most of the jobs will be from marketing, sales and administration, but several engineering jobs will also be cut.

The announcement comes after AMD Chief Executive Hector Ruiz described AMD's recent performance as "unacceptable."  Ruiz said that as many as 800 jobs, the equivalent of 5% of AMD's workforce, would face possible elimination.

"There is no way to sugarcoat our performance in the first quarter," after the company posted a $611 million loss, said Ruiz.

Industry analysts are unsure if AMD will have to cut more jobs in the near future.  "I'm surprised the number is as small as what it is," said Brian Piccioni, a BMO Capital Markets analyst.

American Technology Research analyst Doug Freedman believes the job cuts could "save the company about $40 million per annum in operating expenses and add 8 cents to the bottom-line."

AMD recently detailed its desktop plans for the next year, which the company hopes will help it regain footing in the CPU market.  It recently unveiled Agena FX, a quad-core desktop CPU, and plans on unveiling Phenom FX next week. 

The company remains engaged in a brutal price cut war with Intel.  Intel slashed prices on the Core 2-family late last month, with deeper price cuts expected this summer.  In addition, Intel was able to neutralize an entire year of AMD marketshare gains in one quarter.

While Intel released the Core 2 Duo chip last year, AMD believes its Barcelona technology will offer better performance since it has four cores on a single die.

Intel recently also announced that it will cut another 1,000 employees at a plant where some employees worked on  200mm silicon wafers.

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

Core 2 + the ATI purchase
By hellokeith on 5/11/2007 5:18:40 PM , Rating: 2
It looks as if AMD is suffering on both fronts. Its revenues are down because of Intel Core 2. And its expenses are up because of the ATI merger.

I think AMD has more nimble, creative people in the engineering/development areas compared to their much smarter Intel designer counterparts.

And I think AMD has a good long term strategy. But the question is can they survive the short term to make it to the long term?

Perhaps AMD should accept, at least for an interim period, its previous position as a value hardware provider. It took AMD some time to take the performance lead away from Intel. Prior to that, AMD hardware was not faster or better than Intel, but it was much cheaper. And that helped them build a base. To make it through this rough time, they should again look to that value-conscious base.

RE: Core 2 + the ATI purchase
By Mitch101 on 5/11/2007 5:29:43 PM , Rating: 2
I think what they did wont yield any quick returns but in the long run its the right decision when you look at the big picture. Read ANANDTECH's article.

Also any time there is a merger there is duplicate positions that should be eliminated. Sometimes it takes a little while to determine where to make cuts.

Core 2 did put a dent in AMD's plans but I expect them to bounce back into the game.

If all works well AMD will reduce existing inventory as much as possible while stockpiling K10 and have enough to supply the channel for the BACK TO SCHOOL LAUNCH. Thats the most profitable time of year and I suspect thats AMD goal to have all thier ducks in a row for a massive assualt on Intel since we pretty much know a K10 at 2.5ghz beats a Conroe and should beat Penryn in NON SSE4 benchmarks. Also the rumors of AMD having 2.9-3.1ghz chips on the respin of silicon. This might be AMD's biggest launch ever they need to get it right even if everyone today wants to see benchmarks.

RE: Core 2 + the ATI purchase
By darkpaw on 5/11/2007 5:47:32 PM , Rating: 2
There won't be any K10s for the back to school period. The other article that was just posted today said they are shooting for Christmas.

RE: Core 2 + the ATI purchase
By RW on 5/11/2007 9:50:45 PM , Rating: 2
The latest news is that K10 does have SSE4A read more on:

So it should be competitive even on SSE4 benchmarks.

RE: Core 2 + the ATI purchase
By defter on 5/12/2007 5:41:56 AM , Rating: 2
??? Why would it? Barcelona doesn't support SSE4.1 or SSE4.2.

RE: Core 2 + the ATI purchase
By Amiga500 on 5/12/2007 12:03:29 PM , Rating: 2

From this it appears to support SSE4a.

This has differences from SSE4.1 and SSE4.2 which intel are going to introduce. What the differences are I am not sure.

RE: Core 2 + the ATI purchase
By defter on 5/12/2007 1:38:37 PM , Rating: 2
The difference is huge. Your link showed that SSE4a includes only 4 new instructions: "MOVNTSS, MOVNTSD, EXTRQ, INSERTQ".

Intel's SSE4.1 includes 47 instructions and SSE4.2 includes 7 additional instructions.

Thus SSE4a will not make much difference in media encoding.

RE: Core 2 + the ATI purchase
By jpeyton on 5/11/2007 5:32:45 PM , Rating: 4
AMD can't beat Intel at anything, it seems.

Cutting 400+ jobs is a paltry number compared to Intel's planned job cuts of 11,500.

RE: Core 2 + the ATI purchase
By TrogdorJW on 5/11/2007 5:52:35 PM , Rating: 3
Cut jobs by large corporations happen all the time. Then they bring people back in as consultants, or they hire new people elsewhere after a new location is completed. It sucks to lose your job, but that's one of the joys of working for a corporation.

RE: Core 2 + the ATI purchase
By sdsdv10 on 5/11/2007 6:21:36 PM , Rating: 2
It sucks to lose your job, but that's one of the joys of working for a corporation.

I didn't know only people who worked for corporations lost their jobs. I be sure to avoid them next time and have a job for life! ;-)

RE: Core 2 + the ATI purchase
By Dactyl on 5/11/2007 7:04:03 PM , Rating: 5
I only buy all-natural, shade grown CPUs from indigenous silicon farmers. My conscience is clear.

RE: Core 2 + the ATI purchase
By hlper on 5/11/2007 5:45:35 PM , Rating: 2
The problem with AMD trying to reclaim the value title is that Intel has already anticipated that move. You can already buy a value priced E4300 for barely over $100, and prices are going down.So, I don't see how AMD could make money on a more inexpensive product.

I think AMD's best plan is the one they have right now, which is to produce a product that is unique and able to beat Intel processor technology (at least in some applications). AMD won market share from previous Intel buyers by performing very well in the gaming segment, and they need to appeal to a group of enthusiast users in that way again.

RE: Core 2 + the ATI purchase
By Hydrofirex on 5/11/2007 6:05:47 PM , Rating: 5
Prior to that, AMD hardware was not faster or better than Intel, but it was much cheaper.

What you're proposing sounds good in theory, but if you think about what's going on you'd realize that this is exactly why this pricing war is so brutal on AMD. They are trying to reprice down to the lower end of the market to stay competitive, and Intel just keeps cutting their prices for equipment that is pretty much superior on every front. Moral of the story: Intel is pricing such that they are squeezing AMD even at the value end of the market. Which is why AMD is in it's current situation. Intel must have learned in the last round that if it lets a sleeping dog alone it will get bitten....


RE: Core 2 + the ATI purchase
By Bonesdad on 5/12/2007 2:31:02 PM , Rating: 2
WHich says to me that Intel products have a huge profit margin, on a per CPU basis. They would not continue to cut prices if it was costing them $$ to produce the CPUs

RE: Core 2 + the ATI purchase
By Russell on 5/11/2007 8:48:58 PM , Rating: 2
Another problem with returning to the value end is that it's more difficult these days to pay for the constant process technology and fab development that these companies require. Both the R&D and equipment are much, much more expensive than they were a decade ago. I don't believe a CPU vendor selling only low-end CPU's could finance these facilities without using out-of-date technology. Of course, if your technology is out-of-date, good luck catching up.

"My sex life is pretty good" -- Steve Jobs' random musings during the 2010 D8 conference

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki