AMD Optimizes Cost Structure to Enhance Competitiveness and Accelerate Growth

Ow. 10% terminated by the end of Q1'10. This is not good news ... :-/

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.


Belgium Massman says:

AMD internal restructuring affects enthusiast segment first? Not sure whether he quit himself or actually got laid off and if it had anything to do with Bulldozer. Where there's smoke, there usually is fire though.

I just heard that Simon Solotko ( 64NOMIS) is no longer with AMD. Now I'd gotten to know him personally over the past couple years and this news really saddened me. Simon brought to AMD a passion to promote their products by showing all of us the posibilities of what could be done. He pushed the limit's and sought out the best people to work with him. I first saw him at the XS party a couple years back when SF3D,Sampsa,MACCI and Pete Hardman were set up in a tent doing the first public display using LHe. Simon was on the PA in the middle of the tent explaining what was going on and he owned that room. Then the Black OP's presentations he orcestrated allowed all of us to share in the adventure. Then this past Sept1 I saw him at AMD in Austin,Tx at the journalists pre rollout. To watch him and see the enthusiam in the guy was really something to see. Sure he was working and yes, thats marketing but there was more to it than that. It was that passion that came through to me. Simon, we'll miss you and best of luck no matter what path you travel

Belgium Massman says:

EXCLUSIVE: Letter from AMD CEO Rory Read to the Company

We have received a letter which Rory Read, the new AMD CEO announced massive layoff to the remaining employees of the company. From what we heard, of the 1400 people that AMD laid off, there is about 60% of the marketing department, with known executives such as Patrick "Pat"Moorhead (VP Marketing), John Volkmann (VP of Brand), Dave Kroll (Head of PR), complete product reviewer support team all getting the boot. The cuts however, did not touch just the marketing and sales staff. Key Fusion engineers were let go as well. As the third paragraph states, AMD will announce its new course, codenamed "Project WIN"on November 9th, 2011. We are publishing the letter "as is": "Team, Today we undertook the difficult, but necessary step, of implementing a reduction in our AMD workforce. This is a company-wide action that will include all functions and locations across AMD and impact approximately 10% of our global workforce. A decision to lay off fellow employees is never easy or taken lightly, but these reductions are a required step to remain competitive and ready the company for 2012. This action was necessary to rebalance our skillsets, drive to a more competitive cost structure and enable us to fund our key growth areas. Over the past 60 days we have been working through a detailed review of our business, our market and our growth opportunities. Our industry is at an inflection point as new trends emerge around the consumer experience, the breakdown of traditional control points and technology convergence. It’s clear we have to take aggressive steps to create distinct value for our customers, and must optimize our existing business today while enabling the company to capture future growth. If we do not take action now, we will miss these opportunities and be squeezed out. To strengthen our market position, we have to rebalance our skillsets to better align with these market shifts and implement a more competitive cost structure. Our competitors are serious and significant, and we will take the required actions to beat them. All of the transformation work we have underway, like Project WIN, will help drive operational improvements, increase efficiencies and lower our operating costs, but we need to take additional action. A lower cost base allows us to be more competitive today and to invest back into the business to fuel our "attack" strategies in- low power, emerging markets and the cloud. I will share more insights into our strategy and path forward in my upcoming Worldcast on November 9th. I believe in my core that AMD is uniquely positioned to take advantage of the opportunities in front of us, and it is up to us to seize them. If we stay focused and continue to tap into the fighting spirit that lives within the walls of AMD, we can build momentum every day moving forward. We must continue to come together as an organization and write the next chapter for AMD – together as one unified company. We are building a company to last and need every single AMDer around the planet working together and toward the same goals. This is our company and our time to seize the opportunities, to step out of the shadows of others and to lead in this changing technology landscape. There is no question it is difficult to see our friends and co-workers move on. But we cannot allow this to reduce our focus or commitment. We still have work to do as we prepare for 2012 and I am entirely confident that we will be ready. We must keep moving forward. Customer interest for our products is positive and demand remains strong, so it’s critical that we remain focused on delivering on our commitments in Q4. Please do not let up or pause. We must act and must always do what we say and own what we do … it’s the AMD way. Together we will accomplish great things. Rory"

Canada Vinster says:

wow, bummer for that 10% :(

United States Hondacity says:

With what happened with BD, They definitely need some restructuring. They have to reinvent their cpu-core technology. Focus on Performance with the Least AMount of Wattage. I'd like to see that. Change their VRM scalability/efficiency for future die-shrinks. No more sharing-resources BS. Sorry for Hardware talk, but thats what they lack. For their marketing, I'm sorry for Simon.

Colombia saint19 says:

Sorry heard that, for all people that will lost their jobs and for Simon, hope that AMD can do something better to solve the big BD problem that they did.

United States sin0822 says:

they need to restructure their R&D, not really marketing, their engineers failed. its not like marketing can make a product better than it actually is.

Romania Monstru says:

Oooooh, the marketing failed big time, and this isn't the first time.....

Argentina Sweet says:

AMD still wrong, 1400 peoples laid off !!! this is not the solution, like as the problem lay off workers in Greece and in the others countries , that's not the solution.

the problem isnt the people of marketing's team, the marketing policies used in addition to products with lower quality than the competition. (Intel, etc)

Ceos's decision are wrong!!

Many years of bad decisions by management, are paid with layoffs of many peoples ?

I dont think so.......:rolleyes:

IMHO...Maybe....lay offs of management, could be the solution...

Btw...The world are change, anarchic capitalism is not sustainable, only true capitalism is one that can be output to the problems of countries and their companies "...There are none so blind as those who will not want see..."

TaPaKaH says:

I guess AMD know best, as end users we can only see very little part of the actual picture.

United States Bobnova says:

Yes, lets remove the engineers that came up with a product that sells quite well so that we can improve growth! Really? I mean marketing maybe, I haven't seen a whole hell of a lot come out of them anyway, but chip designers are rather crucial to the chip design process.

GENiEBEN says:

No one noticed, or am I talking from future...again.... "by the end of Q1'10"

United States Redwoodz says:

Well that's bad for the marketing guys, but if I'm trimming the fat to maximize my companies efficiency, it's no surprise marketing would be the likely place.

Argentina Sweet says:

Yep, but....No sector employees are "Marketing" that dictate the strategies (politics) and ways forward, managers or executives are those who make these directives, but when they are wrong .... lay off workers, instead of dismissing that they were wrong in the strategy.

Btw. there are 1400 more people than ever are going to buy AMD, and the attitude of the company to make such a "disaster" does not help in advertising...."zero marketing" :rolleyes:

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