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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.


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Speculation :X
By Puddleglum1 on 5/11/2007 5:38:58 PM , Rating: 3
People who buy computers I build think I'm a magician. Likewise, I have no idea how all the gates and transistors in CPU's are constantly and almost proportionately increased and improvised year after year. My Assembly Language class helped me understand the basic principles, but as for how two companies can compete neck and neck using separate engineers and even design methodologies, it's in the least a marvel to see year after year how competing products perform so closely.

Obviously that's just an emotional reaction, because there's a rhyme and reason behind all this, but I'm simply not in the know.

However, what I do know is that AMD's desktop CPU's sold last quarter (and quarter before that) are still lacking behind Conroe and Allendale. The price cut was last quarter and quarter before that. Those two combined makes me think that last quarter is going to be the first wake before the real wave of their poor earnings hit.




RE: Speculation :X
By crystal clear on 5/12/2007 1:03:52 AM , Rating: 1
quote:
Those two combined makes me think that last quarter is going to be the first wake before the real wave of their poor earnings hit.


Yes you are right & predict correctly.
Its a well known fact that 2007 is a year of losses all the way through 1Q 2008.

Instead of concentrating on profits they AMD will be preoocupied with loss reduction & damage control. Its like your area is about to be hit by a CYCLONE/HURRICANE-
you know it will wipeout anything/everything in its path.
Your prime objective is to survive & limit damage to property.

quote:
Obviously that's just an emotional reaction, because there's a rhyme and reason behind all this, but I'm simply not in the know.


You are cetainly very honest with yourself & on this site.
You speak your thoughts which are very down to earth.
I admire this quality in you.
Your title "Speculation :X" is very good indeed.


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