AMD officials say the job cuts are part of a larger initiative aimed at positioning the company to pursue efforts in low-power computing, emerging markets and the cloud.
Devices will lay off 10 percent of its workforce as part of a larger effort to
cut more than $200 million in expenses in 2012.
with the world's second-largest chip maker said Nov. 3 that the cost-cutting
moves-which include not only the layoffs but also other efforts aimed at
streamlining the operations at the company-are meant to better position AMD to
pursue initiatives around low-power computing, emerging markets and the cloud,
all areas that the company is putting a particular emphasis on going forward.
The goal will
be to take a large portion of the savings gained through the workforce
reduction and streamlining efforts and reinvest in R&D and strategic
activities in the three primary focus areas.
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," AMD
President and CEO Rory Read said in a statement. "The actions we are taking are
designed to improve our ability to consistently address the needs of our global
customer base and stake leadership positions in lower power, emerging markets
and the cloud."
officials said they expect the restructuring effort-which includes not only job
cuts but also the cutting of some contracts-will save about $10 million in the
fourth quarter and another $118 million in the first quarter of 2012. The
layoffs will be completed by the end of the first quarter, and will span all
functions and all global regions, according to AMD.
As of July,
AMD had about 11,100 employees in 47 locations around the world.
This has been
something of a roller-coaster year for AMD, which at the 2011 Consumer
Electronics Show launched the first of its long-awaited Fusion processors,
which offer CPUs and graphics technologies integrated onto the same chip. The
Fusion accelerated processing units (APUs)-which AMD calls the chips-was the
result of AMD's $5.4 billion acquisition of graphics-chip maker ATI
Technologies in 2006.
At the same
show, larger rival Intel unveiled its own processors with integrated graphics,
based on its Sandy Bridge architecture.
after the release of the APUs at CES, Dirk Meyer resigned as AMD's CEO after a
falling out with the board of directors over the direction of the company,
particularly over the chip maker's relatively slow response to the booming
mobile-device market, particularly smartphones and tablets. That set off an
eight-month-long search for a replacement that culminated with the hiring of Read
who had been president of PC-maker Lenovo.
search, AMD continued to roll out APUs
aimed at everything from low-power PCs to mainstream
desktops and notebooks to embedded devices, with executives saying the ramp-ups
of some of these products were among the fastest in company history.
analysts were critical of AMD's slowness in finding a CEO, saying not having a
someone permanently in the job-it was being held on an interim basis by CFO
Thomas Seifert-put AMD at a greater disadvantage in an environment that not
only saw traditional rival Intel growing stronger, but also the rise of ARM,
whose chip designs dominate the mobile-device space.
In July, JMP
Securities analyst Alex Gauna in a research note questioned how well the APUs
were being received, and added that AMD "is rapidly becoming irrelevant due to
the rise in ARM-based alternatives and the rise of tablets. ... AMD's problems
are compounded by management turbulence, both internally and at its foundry
spin-out [Globalfoundries]; as well as by its consumer-centric business model
where there has been ample evidence of weakness."
Even the third
quarter was a mixed bag for AMD. Earlier in the quarter, AMD executives
downgraded their financial forecast for the quarter due to manufacturing problems
at Globalfoundries. However, in late October, AMD reported a $97 million profit
for the quarter and a 4 percent growth in revenue.
conference call with analysts and journalists to discuss the financial numbers,
Read and Seifert also laid out the company's focus on low-power computing,
emerging markets and the cloud. During the first and second quarter, Seifert
also talked about new initiatives designed to streamline business operations
and decision-making processes. Those efforts are key parts of AMD's
cost-reduction efforts, with projected operating cost savings of $90 million.
an AMD spokesman, part of the plan is to ensure that the company has the right
employees with the skills needed to push its growth efforts. In this "workforce
skill set rebalancing" effort, the company will determine what skills they need
in what regions and get the right people in place, he said. That means that AMD
might rehire for some of the jobs lost based on the necessary skill set.