AMD To Close Plants, Lay off 2300, Lose Gateway

cdrudge writes: "According to this article on CNN, AMD will be closing 2 plants in Austin, TX and also their operations in Penang, Malaysia due to slack demand. 2300 jobs will be cut in the process. The same article mentions Gateway dropping it's 'Select' line of computers. Their 'Select' line of computers were Gateway's only AMD-based systems. A Gateway spokesperson said 'We're consolidating all of our offering behind Intel, which was the biggest part of our mix already.'"

Comments

And yet more slashes to the crippled workforce

[weslocke]

That brings it up to what? 30,000 or so lost jobs over the last couple of weeks? Definitely not very encouraging.

Though on another note, it's very disappointing to see Gateway abandon AMD in favor of Intel. Considering that the AMD processors have a tendency to 'whoop the crap' out of comparable Intel chips (when you factor in the cost, especially) it seems that AMD would've been more logical as a "More bang for the buck" system.

Would anyone like to guess what sort of 'Incentive' was offered by Intel?

Re:And yet more slashes to the crippled workforce

[FFFish]

I really suspect that the job cuts that have been happening in industries in all sectors are more opportunistic than realistic.

By which I mean that these people have been deadwood for a good long time: it's just that while the stock market was rewarding those companies unjustly during the boom, those companies couldn't cut their workforce without severely impacting their stock value.

Now that everything is in the shithole, it's real easy to trash employees: hell, it's even desirable to drop the stock price, so that the company can buy it back for resale at a far greater value once the market recovers!

In support of this, look at the number of companies writing off intangibles. They're deliberately beating down their stocks, or at the very least don't care whether the stock drops any further.

Finally, the one big question I have is this: how the fuck do you end up with thousands and tens of thousands of excess employees? You'd have to be insane to retain that many staff when they're unnecessary -- why weren't they being hired/fired in trickles and dribbles, as the company needed/didn't need them? Makes more sense than the freaking cattle-calls they must have chosen when hiring en masse.

One last note: while being fired is stressful, many of these people are skilled and creative. It may take them a few months to get over the loss, but once they do -- look out! We're going to see entrepreneurship skyrocketing!

I think that's pretty exciting. There's going to be a lot of innovation over the next few years. Gonna drive the economy to new heights!

Just accelerating plans...

[Freedom Bug]

There's not much unexpected here.

The plants being closed were mainly used for foundry business. AMD does not want to be a foundry: the TSMC's of the world do that much better, and AMD wants to focus on their core competencies: processors and flash. The foundry business is almost accidental. It generally comes from AMD spinoffs designing communications and analog IC's who were transitioning to traditional foundries. Now they'll just have to transition faster.

The Gateway move was also not unexpected. Gateway is in lots of trouble. They want their big friends (Intel) to help them out, and so they are demonstrating their loyalty to their big friends.

Bryan

Not the end...

[rkischuk]

AMD clawed its way up on the merits of its products and zero OEM arrangements. In some ways, not having OEM arrangements is good, since computer manufacturers bully their suppliers down to razor thin margins. NVidia's increasing support for AMD should push things along in the end-user/gaming market, and the new multi-processor chipsets are helping AMD crack a market they've hardly touched - the server market.

The plants they are closing are their oldest plants, and coincide with a reduction in output that has been seen throughout the sector. It is even possible that it was becoming increasing difficult to find current products that these fabs were capable of producing.

This isn't the end of AMD, it just means they won't be posting earnings of 50 cents a share each quarter for a while. Intel's feeling the same crunch, and AMD's still got some decent cash reserves.

Gateway wasn't really "selling" Athlons anyway

[pythas]

Our company tried to buy 200 Athlon based systems from Gateway to replace our four year old Pentium Pro machines. They refused to deal at all with us. We couldn't get a configuration we wanted, even though it was clearly possible. They wouldn't give us an extended warranty or upgrade coupons.

Basically, they told us that "businesses don't want AMD, so we won't sell them to you."

Talked to an AMD Rep

[strictnein]

Sell computers for my job (in addition to being a full time CS student). I talked to the AMD rep who comes to our store. He had threemajor points:

One: no new processors from AMD anytime soon. Just renaming the processors and removing mention of the Athlon name (AMD 1600 for the 1.2 GHz, AMD 2100 etc).

Two: They are making a killing in the corporate market.

Three: There next big focus area is the laptop market. This will be the only place with "new" AMD processors. Most likely people will see more 1.0 GHz+ AMD based laptop systems soon.

Here's an Idea

[ClubPetey]

This might be a little off-topic, but as far as I see it, the problem with Gateway not being able to support a line of computers that does sell that many, is the support cost behind it. You need AMD-knowledgeable tech support, different MoBos, different assemblies, etc.

Dell, IBM, etc. all have the same problem. And it all seems to be related to the fact that the support costs for a low-margin, low-sales product line is too high. So why are the costs so high? From my experience, it's customer support. Too many people don't know how to use a computer and call (harass) the computer companies tech-support for the most minor of issues.

So I was thinking... let's turn it around. Create a computer company for smart people. Do not offer tech support. Do not offer customer service (outside of basic order processing) Just assemble and ship the product. If you don't know how to use it, don't buy it from us. A side benefit of this idea would be that "hard-core" computer geeks can stop wandering from site to site to build their computers. Since there's little over-head to cover, prices will stay cheap.

The same idea can be applied to ISPs. The major cost of an ISP is the customer support staff to go along with it. I'm sure there's a LOT of people out there that would gladly save 10%-25% of their Internet fee in exchange for having no customer support (since most people-in-the-know don't use it anyway).