AMD Optimizes Cost Structure to Enhance Competitiveness and Accelerate Growth

[btarunr]

AMD announced a restructuring plan and implementation of operational efficiency initiatives designed to strengthen the company's competitive positioning. AMD expects that these combined actions will create a more competitive cost structure and rebalance the company's global workforce skillsets, helping AMD to continue delivering industry-leading products while improving productivity, reducing time-to-market and better aligning with key industry trends that are expected to drive growth.

"Reducing our 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," said Rory Read, AMD president and CEO. "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."

AMD expects that the restructuring plan will result in operational savings, primarily in operating expenses, of approximately $10 million in the fourth quarter of 2011 and $118 million in 2012, primarily through a reduction of its global workforce by approximately 10% and the termination of existing contractual commitments. The workforce reduction will occur across all functions globally and is expected to be substantially completed by the end of the first quarter of 2012. Based on anticipated savings from the restructuring plan, AMD expects fourth quarter 2011 operating expenses will be approximately $610 million.

As a result of implementing efficiencies across the company's operations, AMD expects to save approximately $90 million in 2012 operating expenses in addition to the restructuring plan savings, resulting in more than $200 million of expected combined operational savings in 2012.

The company expects to reinvest a significant portion of the savings to fund initiatives designed to accelerate AMD's strategies for lower power, emerging markets, and the cloud.

The company's actions pursuant to the restructuring plan will take place primarily during fourth quarter of 2011, with some restructuring plan activities extending into 2012. The company currently estimates that it will record restructuring expense in the fourth quarter of 2011 and in 2012 of approximately $101 million and $4 million, respectively. Of the total restructuring expense, approximately $56 million will be future cash expenditures in 2011, $33 million will be future cash expenditures in 2012 and $15 million will be future cash expenditures in 2013.

View at TechPowerUp Main Site

 

[btarunr]

What a piece of literature this carefully-worded PR is.

 

[catnipkiller]

AMD "We dun goofed" now your fired

 

[FreedomEclipse]

Only one thing to say about this...

 

[Fx]

What a piece of literature this carefully-worded PR is.

my thoughts exactly.

 

[badtaylorx]

Quote translator......"We had four years to re-establish our position as an equal to Intel. Now ARM is coming in to take our spot. Im firing everyone who sucks....please go work for ARM or Intel and make them suck now......."

 

[Thefumigator]

Its funny how the world is entering in a downward spiral economically, where the U.S. most qualified economists say the world will face something never faced before, so there's no way of knowing what will happen, while half europe is in trouble and the U.S. can't get out from stagnation where it has a problem with inflation, recesion, and bonds.

And intel is wealthy and healthy, as usual, and AMD is in trouble, once more...

 

[newtekie1]

So this is just a really long winded way of saying they are firing a bunch of people. Cost optimization...I'll have to remember that...

 

[f22a4bandit]

Shifting focus on lower power, emerging technologies and the cloud...sounds to me like they're going to focus more on tablet/laptop chips instead of consumer desktop. Fusion really is their future with the way this is reading.

 

[nt300]

Rory Read is not a guy you want to try and screw over. He'll turn AMD around for the better in an aggressive fashion. Mark my words. It may seem as though Desktops are on the chopping block, no no, far from it, read between the lines. Never let a wolf (Intel) know your plan (AMD).

 

[Inceptor]

Shifting focus on lower power, emerging technologies and the cloud...sounds to me like they're going to focus more on tablet/laptop chips instead of consumer desktop. Fusion really is their future with the way this is reading.

No surprises there. This is the way they've been moving for a while, regardless of what everyone else thinks or wants of them.

Rory Read is not a guy you want to try and screw over. He'll turn AMD around for the better in an aggressive fashion. Mark my words. It may seem as though Desktops are on the chopping block, no no, far from it, read between the lines. Never let a wolf (Intel) know your plan (AMD).

Oh, there will be desktop chips, but after Piledriver, they'll be APUs, and only APUs (aka Fusion technology). They won't be competing with Intel at the high end, stop hoping. As always, they'll be in the low-to-mid verging on mid-high performance (best case with overclocking) markets.

 

[f22a4bandit]

No surprises there. This is the way they've been moving for a while, regardless of what everyone else thinks or wants of them.

Yeah, just a little more affirmation for people thinking otherwise. I honestly think it's smart as they're doing great with their Fusion products.

 

[Damn_Smooth]

Shifting focus on lower power, emerging technologies and the cloud...sounds to me like they're going to focus more on tablet/laptop chips instead of consumer desktop. Fusion really is their future with the way this is reading.

Intel is going in the same direction, they just happen to add a performance increase at the same time. If AMD can't figure out how to do that, they should just drop the CPU division altogether. If lower power is truly their focus, they failed hard with Bulldozer.

 

[HalfAHertz]

No surprises there. This is the way they've been moving for a while, regardless of what everyone else thinks or wants of them.



Oh, there will be desktop chips, but after Piledriver, they'll be APUs, and only APUs (aka Fusion technology). They won't be competing with Intel at the high end, stop hoping. As always, they'll be in the low-to-mid verging on mid-high performance (best case with overclocking) markets.

There will always be a desktop chip just because there will always be a server chip. The server market is huge and keeps growing and once you have an established infrastructure, it's easy to adopt it from one workload to another i.e. from server to desktop use. The problem is that the transition is not always flawless- case in point Bulldozer...

 

[Inceptor]

There will always be a desktop chip just because there will always be a server chip. The server market is huge and keeps growing and once you have an established infrastructure, it's easy to adopt it from one workload to another i.e. from server to desktop use. The problem is that the transition is not always flawless- case in point Bulldozer...

No, I don't think so. The Bulldozer design was a server chip design, and a future looking desktop design (maybe). The architecture they've gone with is great for servers, but can't compete with Intel on desktops (1 to 4 threads). Its design would work much better with an on die iGPGPU, in other words, a Fusion technology APU. Economically, there is no reason for them to market a discreet CPU after Piledriver. Their market in desktops/laptops will be dominated by APUs of various types; it would not be financially viable for them to market a discreet cpu to the relatively small market that would purchase it, when they can just sell an APU which will be paired with a discreet GPU. And if the rumours are true, perhaps they have something special planned for APU+dGPU (the rumoured cpu module on the GPU die).
AMD doesn't have it's own fabs all over the world, like Intel. They have to streamline production and maximize the amount of silicon that makes it to market for each of their chip lines. And their money makers are the APUs. With AMD cutting costs, producing discreet desktop CPUs is a waste of fab production time, when they can just be focusing on discreet sever versions instead. That leaves the rest of the production for Fusion branded APUs, desktop and low-power variants.
Simplification of production introduces simplification and reduction of costs, which increases operating revenue.

 

[v12dock]

Management and marketing sucks, the engineers are fine

 

[Deleted member 67555]

So they are gonna fire 30% of their workforce and replace 20% of them with Chinese workers right off and then slowly move everything but the Engineers and Management over to China....

 

[Sihastru]

Management and marketing sucks, the engineers are fine

Which one of these three categories do you think will do the firing and which are the two (hopefully two) categories they will do the firing from?

 

[Damn_Smooth]

Management and marketing sucks, the engineers are fine

I think you have that ass-backwards. The engineers suck and marketing is doing a great job of selling the crap that they came up with. I'll agree that management sucks though.

They should really leave the entire GPU division alone though.

 

[WarraWarra]

Seems like everyone is freaking out about the 64bit ARM quad core's. Bit late to freak out now.
Cutting 10% of the works force in Dec/Jan 2012 is not a good idea or at any time.
Getting rid of incompetent leadership in AMD and all the yes cowards "men" would actually make a difference to AMD's bottom line.

All AMD has to do is label the 8150 as a low to mid range i7-3/5*** equivalent that it actually is and launch a new alternative to SB. Cut prices, move more units McDonald's style and try to recover on the loss instead of having only 1% sale of the 8150's.
Recycle, reduce, reuse.

At the rate of this jobs cutting they seem to have already failed at having anything competitive lined up for IB and giving us a hint at that failure.
It is not the failure but the recovery from failure that makes or brakes a company / country and how you deal with it.

Amazing that Canada lost 54000 jobs and this AMD 10% is also going to be added to it and still every attempt to invest and create jobs in USA / Canada is blocked by senators, governors to top leadership and then they cry help us create more jobs LMAO.

 

[HalfAHertz]

ROFL at anyone who thinks ARM is a threat to x86 anything.... The latest and greatest cortex A9 dual cores produce roughly 40-45 megaflops @ 1,2 GHz...A 2500k produces north of 100 gigaflops at stock. So to get a similar performance level, you'd need about 2000 of those "amazing" ARM CPUs.

 

[Neuromancer]

There will always be a desktop chip just because there will always be a server chip. The server market is huge and keeps growing and once you have an established infrastructure, it's easy to adopt it from one workload to another i.e. from server to desktop use. The problem is that the transition is not always flawless- case in point Bulldozer...

Cloud computing, thats the new marketing phrase for it.

Build powerful servers and underpowered machines for end users. BAM just took sandybridge/sandyB-E out of hte equation.

AMD is not going ANYWHERE. Yes they will still keep building desktop chips, and yes they might get better and compete with intel at least on the priceerformance market, they might not too, but they will still be there in 10 years.

 

[Neuromancer]

ROFL at anyone who thinks ARM is a threat to x86 anything.... The latest and greatest cortex A9 dual cores produce roughly 40-45 megaflops @ 1,2 GHz...A 2500k produces north of 100 gigaflops at stock. So to get a similar performance level, you'd need about 2000 of those "amazing" ARM CPUs.

GPU offloading anyone?

http://en.wikipedia.org/wiki/Comparison_of_Nvidia_Graphics_Processing_Units#GeForce_500_Series 1500 GFLOPs on the 580... even a relatively low power GPU should be capable of 1/10 that.

Also wasnt hte FLOPs capabilitys of the 500 series cut down so as not to compete with Quadros?

EDIT: I guess not the Quadro 6000 only puts out just over a TeraFLOP

EDIT:

AMD Firestream cards are http://en.wikipedia.org/wiki/AMD_FireStream

2.6 TeraFLOPS for their high end in single point testing. .5 in double precision (not comparable to any of the other statistics)

 

[Casecutter]

Rory Read is not a guy you want to try and screw over. He'll turn AMD around for the better in an aggressive fashion. Mark my words. It may seem as though Desktops are on the chopping block, no no, far from it, read between the lines. Never let a wolf (Intel) know your plan (AMD).

I concur somewhat, but not to that extreme... more to the theory it's just business.

Rory has known from before he arrived cutting the workforce was inevitable, to clear the “deadwood”, get the ones that are retained whipped in place, and let the shareholder know he's in control. The problem the new guy can't determine very easily where the deadwood and how much to cut, given the limited time in the position. Normally the "Peacocks" come strutting around looking righteous, and normally end up given (due to limited time) the task of tagging the "sub-par or those they see as a threat" with pink slips. Normally the ones who aren’t the problem, just the one the Peacocks see endangering their status.
I want to hope Rory seen enough before this to know listen to more of the regular folk, than management. More often you can get an earful from the midlevel workers to balance before making such a move. Regrettably, I doubt he had the time to get it right, as you’d positively want this to be over and done in 2011, allow a clear path all of 2012 to stake out his vision.

 

[robal]

What a piece of literature this carefully-worded PR is.

It is indeed.
Still, it's just a buzz-word ridden management newspeak BS.

Fortunately, we all know true meaning of these words anyway.

Cheers,