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AMD Cuts Its Workforce by 10% to Fund New Strategies

By - Source: Tom's Hardware US | B 78 comments

AMD to divert resources to lower power, emerging markets, and the cloud.

As one of the first big moves after Rory Read assumed the role of AMD president and CEO, the company today announced a restructuring and cost-cutting plan designed to strengthen the company's competitive positioning.

"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 Read. "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 will be cutting its global workforce by approximately 10 percent and terminating existing contractual commitments. AMD expects that the restructuring plan will result operational savings, primarily in operating expense, of approximately $10 million in the fourth quarter of 2011 and $118 million in 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.

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

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Top Comments
  • 25 Hide
    adjman , November 3, 2011 9:14 PM
    hopefully they didn't cut development on graphics
  • 24 Hide
    Dekasav , November 3, 2011 9:10 PM
    And here's AMD dropping out of the high-performance race.

    RIP
  • 21 Hide
    BlackHawk91 , November 3, 2011 9:18 PM
    I hope these cuts don't affect the next Radeon GPUs.
Other Comments
  • 20 Hide
    memadmax , November 3, 2011 9:07 PM
    Thats not good.
  • 24 Hide
    Dekasav , November 3, 2011 9:10 PM
    And here's AMD dropping out of the high-performance race.

    RIP
  • 5 Hide
    Marco925 , November 3, 2011 9:11 PM
    memadmaxThats not good.

    Doesn't necessarily mean that the company is in trouble, restructurings can happen without problems, i think this is a good move, it'll help with the research and development costs to get the extra edge against intel whose budget is a behemoth compared to AMD
  • 21 Hide
    stm1185 , November 3, 2011 9:13 PM
    I hope they start with the people who pushed the Faildozer module design.
  • 19 Hide
    borden5 , November 3, 2011 9:14 PM
    yes yes fire all dem bulldozer maker
  • 25 Hide
    adjman , November 3, 2011 9:14 PM
    hopefully they didn't cut development on graphics
  • 15 Hide
    jimmysmitty , November 3, 2011 9:15 PM
    He could take a pay cut to help save money. Not sure $1million a year is needed.
  • 21 Hide
    gmcizzle , November 3, 2011 9:15 PM
    Bulldoze the Bulldozers
  • 18 Hide
    stingstang , November 3, 2011 9:16 PM
    Those cuts aren't going to make him popular within the AMD community.
  • 21 Hide
    BlackHawk91 , November 3, 2011 9:18 PM
    I hope these cuts don't affect the next Radeon GPUs.
  • 20 Hide
    cuecuemore , November 3, 2011 9:38 PM
    DekasavAnd here's AMD dropping out of the high-performance race.RIP

    You might have missed the memo, but that happened 4 years ago.
  • 17 Hide
    ewood , November 3, 2011 9:39 PM
    I feel like the landscape has changed enough that AMD isnt going to be able to pull an athlon style comeback again
  • 1 Hide
    beenthere , November 3, 2011 9:42 PM
    AMD's board wants to be in all appliances and while there may be some growth there for AMD, I doubt it's a high potential revenue stream for them. The head count reduction is to appease Wall Street types.

    I wouldn't read too much into this PR other than Read is trying to convince Wall Street that good things lay ahead for AMD financially, which bumps share price and executive stock value.

    The doomsayers can relax as AMD isn't going anywhere and will continue to deliver the products that consumers desire.
  • 10 Hide
    buzznut , November 3, 2011 9:53 PM
    Actually trimming the fat is probably what the company needs right now. They as a company have actually been doing better in all phases except for high end desktop CPUs over the last six months. They have become profitable, there's no reason to think that the company is dead because they have to give up the enthusiast processor market.

    beenthere...The doomsayers can relax as AMD isn't going anywhere and will continue to deliver the products that consumers desire.


    Yeah, AMD is going to be fine even if they aren't focusing their energies in the direction you or I would like. They've been making the best integrated graphics solution for a couple of years now and that's a big deal for OEMs.
  • -1 Hide
    Energy96 , November 3, 2011 10:00 PM
    Looks like the price of Intel CPU's will probably skyrocket in the future now that AMD admits it cannot compete and is dropping out totally. Lack of competition sucks but there is no one to blame other than the execs at AMD that keep churning out garbage. I really hope they sell off their graphics division, if Nvidia had no competition either it would be a really sad day.

    Pretty fail IMO but what did they expect that people would just buy them anyway even if they suck? In today's internet savvy market inferior products don't have a chance. In the past you could mask the fail with really good marketing strategies but that just doesn't cut it anymore. Especially in electronics, people are in most cases just way too well informed to fall for it and there aren't enough fan-boys to keep a company that size afloat by themselves.
  • 7 Hide
    alidan , November 3, 2011 10:04 PM
    DekasavAnd here's AMD dropping out of the high-performance race.RIP


    besides the p4 era, were they ever in the high performance area? i thought they were always a decent alternative area and good low cost.

    and again, i say wait till windows 8 and revision 1 of bulldozer to pass judgement. because it will be what, a year, year and a half till intel ships its new design, i cant see ivy bridge doing much besides saving power and gaining 5-10% performance boost.
  • 3 Hide
    jdwii , November 3, 2011 10:19 PM
    I sure hope its the marketing team and engineering team who made and promoted BD.
  • 5 Hide
    11796pcs , November 3, 2011 10:19 PM
    I don't care as much about the CPU market as much as the GPU market. If AMD starts skimping on the graphics department it's all over.
  • -2 Hide
    Anonymous , November 3, 2011 10:23 PM
    Gotta keep those executive bonuses going. To hell with the people who make and buy the product they make.
  • 2 Hide
    SteelCity1981 , November 3, 2011 10:25 PM
    Good idea. AMD doesn't have the resoruces or the money to keep up with Intel in the high performance cpu market. Take what is working good for you now and use it to your advantage. Don't spread yourself out and lose money on products you simply can't keep up with. The automotive industry learnt this the hard way when automboile companies like GM spreaded themselves out beyond their means.
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