AMD to Cut More Than 400 Jobs
May 11, 2007 4:52 PM
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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."
detailed its desktop plans for the next year
, which the company hopes will help it regain footing in the CPU market. It recently unveiled
, a quad-core desktop CPU, and plans on unveiling
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
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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RE: Core 2 + the ATI purchase
5/11/2007 6:05:47 PM
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
5/12/2007 2:31:02 PM
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
“Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down!' Screw them. Seriously, screw them. You can quote me on that.” -- Newegg Chief Legal Officer Lee Cheng referencing patent trolls
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