AMD Reportedly Preparing Massive Layoff
An anonymous reader writes "AMD is preparing to lay off 20 to 30 percent of its workforce after warning of a 10 percent decline in Q3 revenues driven by the weak global economy and PC sales, according to AllThingsD's Arik Hesseldehl. The layoffs will reportedly focus on engineering and sales, and are in addition to a 10 percent headcount reduction 11 months ago. Teams of consultants from McKinsey and Boston Consulting Group are reportedly swarming headquarters to advise the CEO Rory Read, who took over from Dirk Meyer a little over a year ago; several senior executives, including the CFO, have recently departed."
Shut. Down. EVERYTHING.
Just...damn. Intel wins.
How about laying off the consultants instead?
I'm serious. Consultants are nothing but leeches, and they will almost always give you advice on how you can make your company just like every other company in your industry. I yearn for the days when companies looked for ways to set themselves apart, to stand out from the crowd, instead of trying desperately to follow lockstep in line with everyone else. Other companies have massive layoffs, so hey, let's do it too!
Especially the engineers. You need engineers to keep doing what you do. This really bodes badly for AMD, because without engineers, they're basically slitting their company's wrists. I'll bet dollars to doughnuts that they're getting rid of the ones with seniority at that to try to save a few bucks on salary while simultaneously bleeding themselves out of knowledge and experience.
But hey, it's their funeral, so whatever gets the stock price up a little bit so that they can cash out their options, right?
That whole settlement with Intel wasn't enough...governments should have fined Intel for anticompetitive behavior. Now AMD is just circling the drain. :-(
They hired the two Bobs.
What do you do when you are trying to maximize short term shareholder value in a distribution based business?
Cut R&D, get rid of sales staff for new markets...
Hit your profit goal, sell stock, get bonus by the time the company goes under you're long gone with your friends at McKinney.
Usually it takes 3 years in hardware for a R&D cut to show in sales figures... Mark it down also mark down the current CEO will be chilling on his new island by that time
"Nimis exaltatus rex sedet in vertice - caveat ruinam!"
And virtually all through Q3 I've been trying to get my hands on 4 Opterons 16-core (model 6272 I think).
Only last week Newegg finally received some of the new revised version but were out of stock for months.
Either they overcommitted to OEMs or they simply did not provision enough for people like me. If they were quicker to get the revision out I am sure they could have made up for that 10% drop.
I do understand this article is referring to desktop CPU's but the Opterons are still a part of their bottom line.
Have a foot in both x86 and ARM.
Table-ized A.I.
Am I the only one who thinks management teams that bring in consultants to do mass layoffs are pussies? If you fuck up a company so badly 30% of the employees have to go, the very least you can do is not hide in the proverbial closet until it's over.
So, profits are down and the answer is to lay off the people who bring in the profits? Or the people who build the products that make the money?
How is this right in any sense of the word? Instead of spot layoffs to raise the stock price a few cents, AMD should be focusing on beating the tar out of Intel, Nvidia, and ARM manufacturers. Or wondering why AMD doesn't have a chip that can drive a tablet?
Intel will just give them a few billion. Cheaper than to deal with antitrust issues if AMD goes bankrupt.
Early retirement - the perfect recipe for short term savings and long term loss of institutional knowledge!!
But, but, its all documented! So even kids right out of school can replace the laid-off engineers when demand comes back.
Sheesh! It's not like they're VP's or something equally irreplaceable!
3. Profit!
I'm really interested to know how this affects Intel. If their main competitor is (theoretically) starting to die off as a company, that would naturally push them towards a monopolistic state, simply because so few companies *can* compete any more. Building next gen chips seems like it's an awfully high barrier to entry for a company just getting started. With the prospect of becoming an actual monopoly it seems like Intel would really want AMD to continue thriving in just enough capacity to keep sharpening their claws against them. Throwing it out there for the business-savvy or people who have seen it before in the economy, but what do you do to keep your competitor alive?
It's been said before and will again, AMD will not be allowed to die, if only because the PC manufacturers are clever enough to know they need at least two vendors for the most critical part of their product. If Microsoft hadn't played games with Windows 8's ARM build I'd say AMD might be on the chopping block for real, but well, that's Microsoft for you.
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yes, there are overpaid asshats out there. But most consultants are really just employees without health benefits and unemployement insurance. If you see a company with a lot of consultants that's why. You can fire them at the drop of a hat at no cost. It's a sign of the modern economy, and one of the reasons my political views swing so far left.
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the top guys aren't hiding. They're you're ruling class. Multi-multi millionaires. The don't suffer consequences anymore than the kings of old. Sure, every now and then one of them pisses off the rest and gets thrown to the wolves (Bernie Madoff). But for the most part you don't spill noble blood.
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Fact of the matter is that mainstream x86 microprocessors have been good enough for desktop use for the majority of the market for the last several years. With improved process technology, worse microprocessor designs can produce good enough performance. iOS, Android, Linux (Gnome/KDE), OS X and Windows 8 are now somewhat capable of running the ARM ISA. AMD should stop developing new x86 microprocessors, and keep making the current ones for a very long time. ATI should continue to live on. AMD's microprocessor design team should make high performance ARM microprocessor designs for license.
There will be some that demand for high performance, single threaded microprocessors, but that will be a small fraction of the total market.
They stopped developing the Linux driver for my 2 year old video card. The existing driver periodically crashes the entire system when playing games fullscreen in Linux (yeah, I'm the guy that tries to do this, but Steam for Linux is also right around the corner.)
I did this to get away from the nVidia experience and it felt like ATI doubled-down on it. I've been willing to pay a premium for competence but it's getting harder and harder to find it.
Early retirement - the perfect recipe for short term savings and long term loss of institutional knowledge!!
But, but, its all documented! So even kids right out of school can replace the laid-off engineers when demand comes back.
Sheesh! It's not like they're VP's or something equally irreplaceable!
3. Profit!
4. ??????????
They should fire the 'geniuses' who came up with Bulldozer. It was so far behind the i7s, what did they expect?
I strongly object to everyone saying AMD should just make ARM processors. As a desktop users who is an avid flight simmer and graphic artist, I value the high performance desktop PC. Although most of the computer industry has decided to follow the lead of Apple and develop dumbed-down, week, simplistic products, shafting power users like me, they are wrong and the future is not well served by regression in technology
I'm 18, so I'm not cliinging to the past. I simply object to the dumbing down of anything
These people focus on short-term optimizations. AMD needs a strategic fix, not a tactical one. A tactical one will only make matters worse.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
I'll bet dollars to doughnuts that they're getting rid of the ones with seniority at that to try to save a few bucks on salary while simultaneously bleeding themselves out of knowledge and experience.
I'll take that bet. I'm pretty sure they are doing the opposite: laying off all the junior engineers, support engineers, and the sales and marketing force in preparation for having some larger company (with their own army of overseas junior engineer worker-bees) take over. The consultants are there to negociate the headcount on behalf of the purchasers, they have nothing to do with the current management or the current product line. The consultants are like the home inspectors that a you hire when you are buying a house...
My guess is that larger company is probably one of Samsung or Qualcomm, secondary guess would be Apple or Microsoft. Both Samsung and Qualcomm have been hiring AMD (ex ATI) folks left and right for the last few months and if they can pick up AMD for a song, they will probably do it. What any of these companies don't need are a bunch of 2-5 year engineers, supporting engineers, nor sales or marketing employees as a purchasing company, they are likely to just abandon all the current (and planned) product lines. The only thing the want is the core engineering assets (GPU designers and high-speed CPU physical design group) and the patents to deploy in their own product lines. The consultants job is to figure out who those folks are. All the bulldozer architects and APU stuff will probably go in the dumper as soon as the deal is closed.
Put a fork in it. AMD as we know it is probably done.
I've always prefer AMD due to their low price point (I attribute my ability to buy my first computer to this). Would this matter for the regular consumer, if the salesman makes a better commission off of an Intel powered computer, wouldn't he always try to sell Intel first and talk down AMD.
RadeonHD 5870s to run SLI
Sorcery!
Haswell has been delayed by several years.
10% revenue decline, gross margin decline from 44% to 31%.
Suppose they were scheduled to have revenue of 'R' which '0.44*R' is potential profit (minus cost of sales), now they will only have sales of '0.9*0.31*R' which is '0.28*R' is potential profit (before expenses). At their current run-rate, that's R=1.4B, that is ~$224M less money they will have this quarter than they expected to have (and they are already losing money).
To give some perspective on that $224M, the whole company's market cap is under $2B (they just estimated that 10% of that is gone). It's not as if your salary was cut 10%, it's as if lost 10% of your total net worth in a quarter. If this happened to you, wouldn't you be thinking that you have to do something?
Early retirement - the perfect recipe for short term savings and long term loss of institutional knowledge!!
But, but, its all documented! So even kids right out of school can replace the laid-off engineers when demand comes back.
Sheesh! It's not like they're VP's or something equally irreplaceable!
3. Profit!
4. ??????????
5. profit moar!
In the event of a change in control, all of AMD's x86 cross-license deals are void.
In the event of a change in control, all of AMD's x86 cross-license deals are void.
None of the potential purchasers care one iota about x86 cross-licenses. The will take the high-speed CPU design team and make ARM processors and bury the current x86 product line. They will take the GPU designers and make mobile GPUs.
Indeed. 'Tis Cross-Fire with AMD/ATI, not SLI.
I am John Hurt.
Huh, didn't know Diamond was still in business. There's a ghost from the past.
Buy from HIS. They tend to care about their card designs, and have a decent warranty. I've bought several cards from them, haven't had any issues with them to date.
I am John Hurt.
You always bought Intel processors* even when they were far inferior compared to AMD. Now stop that, and just buy AMD processors even if they may perform a bit lower in some measurements in benchmarks (and better in a few others). For example people does not like Bulldozer, because it is not much better on the desktop front than its predecessor, but it is a great server architecture, especially for virtualization and high performance computing. There are quite a few AMD systems in the top 500 supercomputer list. Maybe it will be good enough for you too... The last time I checked an AMD Opteron offered the best performance / price ratio, not an Intel.
Not doing so will bring back the years when processor technology stopped improving and the prices remained high.
(*) Except those who build their own computers, among them AMD is much stronger, there were years when AMD had more than 50 percent.
You get what you pay for. Their CPUs cost half as much, and have half as much of the performance of the Intel based CPUs.
And make no mistake, their days are numbered. I give them two more years of floundering, one more failed processor architecture, and that's it.
They've spent the last 10-15 years anti-diversifying. They got out of the logic business. They got out of the flash business. They got out of the foundry business. Each sale along the way was an emergency stop-gap to boost short term numbers to make shareholders happy, but terrible in the long run.
Then, they leveraged themselves to the hilt to buy ATI so they could compete with the Intel on CPUs with integrated graphics. That was a good move, but they overpaid bigtime. ATI's debts are crushing the company now, and nVidia did not just simply go away as they had hoped in their business plans that were used to justify the whole deal.
It's like AMD has been run by 9th graders in an economics class or something. It's a shame, too, because they used to make decent processors that were better than Intel's for less money. Believe it or not, there are times when you should not quit while you're ahead, but that's exactly what AMD did.
Sayonara, AMD. It was good knowing you, but you are irrelevant now.
There's no requirement that a vendor uses x86 CPUs. ARM desktops and laptops are becoming more and more feasible every day. I expect ARM's rise actually has a lot to do with AMD's falling profits, because more and more people are using tablets and smartphones rather than desktops and laptops.
I left AMD a couple years ago to pursue other interests before all this layoff crap was happening and the mood was pretty good. There was a new team that was started in Russia, but the teams were assured that "this doesn't effect the jobs in Canada, as these are NEW jobs and the team in Canada was growing as well!". Many people bought into this - I didn't. Went back for a visit a few months later, and found out that they had opened two new offices - in Europe and Asia I think. The mood was a bit grimmer - not due to the offices but just the market in general. All these Engineering jobs they are laying off now, when they "create" these jobs again in the future (if AMD improves) will NOT be in North America. They will for sure just expand the teams in Asia/Russia/Eastern Europe. Same level of expertise and capability for less cost. What's not to like? I am not saying that North American engineers are undeservingly expensive. Just that they NEED to make more money to survive in North America due to the high taxes and supporting the general society.
Current employee here (I'm not an official spokesperson, this may not be the corporate line, yadda yadda) let me clarify some stuff.
The thing with Intel is, internally they're actually a worse corporation than even you described. Head hunters I have known almost immediately blanched at their name when I brought it up and said things like .. I do not recommend anyone work for Intel. I have seen the same remarks by the same professionals in print.
Why? For generations now, it's been stocked to the gills with corporate psychopaths. Like above, so below. The level of viciousness of the politics is out of this world . For instance, there's something called "forced ranking" where 10% of their employees with the lowest scores on their reviews are automatically fired each year.
Killing every tenth person in order to improve performance has another name- decimation.. deci-mation. It goes back to the Romans. Crassus used it to motivate the troops to capture Spartacus
Yes, we have problems with people who exist only to further their own career, or that somehow subsist by controlling information such that no one else can get it. The information hoarders in particular are annoying because you have to have their blessing to get stuff done. I believe that any organization with >80k employees is going to have this somewhere in their organization
We have some psychotic managers that act like 2 year olds. They put unattainable deadlines on the board and they hoard resources to do their job. I hear that this was the norm in the previous CEO's days because of the 10% layoffs of which you speak. The way it worked wasn't 10% of the worst employees, but rather entire departments would be cut for failing to meet the numbers. While I have a good manager, and several other people I know have, you may end up having one of these ancient trolls that still exist within the system. The perception is that Paul is trying to clean this stuff up, and the review process has been restructured to try to weed this out.
Intel does have a bad reputation in some of the local communities for various reasons. I hear stories of construction projects that never started, never finished, or sat around forever. I'm sure you're not wrong about your headhunter stories.
For reviews, employees are ranked in a scale against each other. You're put into one of 5 buckets, and you want to try to be in the top 3. The relative performance of each bucket is determined by the performance of you and your peers (i.e. you have to be better than your peers. If they all suck, the bar is pretty low, but if they're geniuses, you better work your ass off.). I don't think there's a set percentage for each bucket. If there's not enough people to compare you to at your site, you're compared to similar people in your hemisphere. This isn't all of it, like there's some more paperwork involved in getting feedback from coworkers and such, but at the end of the day you're in one of the buckets.
I have nothing but praise for AMD.
The SABERTOOTH990FX motherboard 8GB RAM with the AMD FX-8120 Eight-Core CPU and the HIS 7970 graphics card rocks with UBUNTU 12.04/12.10.
AMD also supports opencl very well with the AMDAPPSDK.
There are others here saying ARM is a competitor, but they are competing more in the GFLOPS/Watt market rather than pure GFLOPS. Nobody here mentioned the Loongson Godson 3A/3B cpu competing in the GFLOPS/Watt market, but they haven't arrived in North America yet mainly because of Intellectual Property reasons. Eventually they will arrive in North America.
From my standpoint, AMD does still have its loyal fanbase for desktops and servers which want respectable performance at a competitive price without caring about GFLOPS/watt. I got more bang for my buck when I bought the above configuration. I have confidence in AMD and will be buying other AMD-based motherboards/CPUS/Graphics in the future. I hope whatever AMD internal bickerings they have stay internal and that AMD keep on churning out great product as they have been. Keep in mind AMD, Intel and ARM all have their niche markets and that's why all of them will continue to thrive. AMD's R&D headaches are no surprise, all companies have headaches like these.
There are other reasons consumers/small business owners would also buy non-Intel architecture based systems. For example having different hardware helps to have a better security because if there is an Intel-based virus flying around and it hits a Loongson/MIPS/ARM cpu for example, it will have less probability to propagate. Keeping that perspective there is more of a COOPETITION going on because we need the varieties of CPUs in order to provide better security.
The complexity of hardware helps elevate the level of security. There is effort involved with learning all these different hardware chipsets and their intricacies.
Security is everyone's concern and every consumer should be aware of this and buy accordingly. I look forward to seeing Loongson in the North American market simply because it will make things very interesting for all consumers and small businesses across the planet, but I'm still a loyal AMD consumer because I have been satisfied with their product for over 12+ years and that's nothing to sneeze at. Hats off to AMD.
As I type this on a Asus Transformer Prime Android tablet/keyboard, I realize I haven't turned on my workhorse desktop for a few days. In fact, 90% of my use on the desktop was internet browsing anyways, and I now do that on the tablet. Email, reading pdfs, light gaming, you name it there's probably an app for it now. I have found most of my necessary computing can be taken care of by the Prime, and I enjoy typing on it on my couch vs being tied to the desktop.
While I could try shoehorning that 10% desktop use onto the tablet, I find it easier to just boot it up when I need it, and shut it down when I don't.
I just looked at their financials....
OK, stock price sucks. Guess what, Intel hasn't moved in years either. AMD is profitable. I can't help but think that the decision to lay off a bunch of workers is short term "omg the stock is too low" thinking... and you know what? Dumping workers usually doesn't make the stock price go up any significant amount. All it does is burn out the remaining workers and create low morale and more mistrakes.
I work in semi manufacturing. Mistrakes are BAD. It's better to pay the extra worker (not that my bosses get it either).
I'm really sick of bosses firing people to make the numbers look good. Lets hire some more people to make the numbers look good. Lets put out great product to make the numbers look good. Lets focus on the health of the organization instead of the stupid numbers, to make the numbers look good.
grumble.....
I understood that Thomas Seifert left because he wanted to be a CEO and the only way to achieve that was leaving AMD. The summary makes it sound like a rat leaving a sinking ship
Except that anyone buying AMD won't be getting any of their x86 stuff because there's a lot of cross-licensing with Intel that won't get transferred on a sale.
Anyone who buys AMD at this point will only be getting their GPU division, unless by some miracle the purchaser works out a licensing deal with Intel for x86 stuff. Fat chance.
AMD still has that underdog mentality and maybe this is the problem. AMD needs strong marketing of their products otherwise people won't know who the hell AMD is. I have run amd and intel side by side and I really don't see much of a difference. Even online test's between these chips show that the phenom ii is faster than the i7 in some test's and vice versa but it's usually a few seconds to a minute or 2 - 10 fps difference. Running today's games on my machine is excellent. I can run blender, libreoffice, media center, and windows 8 in virtual box all at the same time on the phenom ii x6 and my system runs just fine it does not come to a crawl. The biggest and most important difference between amd and intel is the pricing. Why spend $200-$1000 on an intel i3, i5, i7 chip when I can get a phenom ii or fx chip for a lot less. I know there are nutty people out there who actually buy intel chips and piss away their money because it's 10 seconds or 10 fps faster than amd.
When it comes down to cpu's the majority of computer users in this country really have no clue what they are using under the hood even though they probably know who Intel is and so AMD has to rely on companies like dell, gateway, hp etc.. to buy their processors for their machines to sell to consumers.
It's a shame, i used to really like their products, built many machines with their CPU's.
I killed da wabbit -Elmer Fudd
@ Intel Corp. in the 1990's they have licenses from other CPU companies so that they can make RISC CPUs.
Since ARM CPU is the trend for CPUs, AMD should get a license to create ARM CORTEX-a15 CPUs.
I think that AMD would be able to generate $Millions of Dollars/profitability if AMD licensed Cortex-a15 dual/quad/maximum cores.
... its a server chip designed for integer workloads when consumer workloads are heavy floating point ...
Consumer workloads are integer, email, browser, etc, ...
Its gamer workloads that are floating point, well high end gamers that is, casual games are probably not heavy floating point.
I'll bet dollars to doughnuts that they're getting rid of the ones with seniority at that to try to save a few bucks on salary while simultaneously bleeding themselves out of knowledge and experience.
I'll take that bet. I'm pretty sure they are doing the opposite: laying off all the junior engineers, support engineers, and the sales and marketing force in preparation for having some larger company (with their own army of overseas junior engineer worker-bees) take over.
I'll double down on the original poster.
All my friends who worked at ATI and saw the layoffs round after round noticed that almost everyone who was let go had way more years of experience than the peers they kept. One round it was a Manager at 15+ years, a Director at 12+, another Manager at 10+ and then a whole bunch of IC's who were at the top of end of their job pay scales. The layoff compensation was based on years of service so some guys didn't have to work for another year if they didn't want to.
Some of it was losing the fat but some was a loss of tribal knowledge.
Have you looked at the level of expertise coming out of schools? College is more expensive than ever so they aren't going to work for cheap and high schools are producing wage monkey drone workers. The other thing is you cannot "document" experience.
I used to think Nvidia would buy AMD for the core IP, which would be really funny if nVidia ended up owning ATI because of AMD's past acquisition. However, I suspect a mobile phone co would snap up AMD first.
IMHO, the desktop battle is over, because the desktop is (largely) done. Intel's biggest competition is Oracle and nVidia in the compute server space, and Apple and ARM in the mobile world. Content creation can be done on laptops easily, especially since CPU-intensive creation can always farm out to virtualization or distributed computing, without even investing in a compute center (e.g., Amazon's compute services).
The glory days of Sanders vs Grove is long gone. Sadly. At least Ellison is still carrying the torch of eccentric billionaire, even if he does look like he strangles hookers.
Yeah, I suspect AMD will be acquired by someone unexpected.
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OK, I did a small benchmark. I run a test program with two threads. In each test run I assigned two cores to the program. Both threads add integers in a cycle, nothing else. The test program completes in 14 seconds if it is running on two cores of the same Bulldozer unit, while it takes 11 seconds on 1-1 cores of two different Bulldozer units.
I was always amazed with AMD's ability to create a cheaper yet better performing chip during the Athlon days. At that time it seemed silly for anyone to even consider Intel.
Runesabre
Enspira Online
Woosh.
This! With AMD having sold all its fabs and always had capacity problems, they should morph the whole company into ATI. No need to remain a competitor to Intel - just be a competitor to NVIDIA, and let Intel be the sole casuality of whatever happens to the x86.
Incidentally, how is Via's Cyrix/Centaur lines doing these days?