AMD Announces Large Job Cuts

[dmens]

Originally posted by: Yoxxy
Hector stays in business because everyone always blames the CEO, as they blame the president on the economy.

In fact it is the engineers that have doomed the company by going to a single die quadcore.

45nm can not come fast enough.

Hector was probably too busy pimping out his office at AMD like he did at Motorola.

 

[Lithan]

Originally posted by: TheJian
I think this place bashes the Inq to much, they have a LOT of good reports and a lot of things people bash them for immediately but they come true a few months later. They usually beat this place to the punch also. Heck I read the news there and already have the story by 6am, when it's not usually posted here until far later in the day. Envy? AT/DT has been blowing it a lot lately (exaggerated headlines, XP 64bit is Orphaned (ROFL), worthless E8400 article etc (overclocking voids warranty and kills chips - OCing doom gloom article)...LOL), but I could find something to dislike at any place over the years. As a forum user, or hardware site reader I have no love for any of them and don't care where I get my info as long as it's good info. Nobody is perfect so it is necessary for us to use more than one source (heck more than 4 probably). Do I like some of the people more in certain forums? Sure. But I don't care about the name on the forum or the hardware site. Just the info. People should get over this "site love"... Is that "love at first site"?...LOL

On to the subject at hand, if they're not firing Hector who cares. They're firing (just another word for laying off...LOL) the wrong people. There's a reason he's on the HALL OF SHAME on Mad Money.... He should be tarred and feathered for getting 9mil when his company lost 3.5B? Jeez. Throw him off a roof-top. He should give all that back. It should be against the law (yeah pass this law..heh) to make money as a CEO when your company loses more than your salary. It should just be made law. Didn't he ruin motorola too? He left before the real crap hit the fan but it's totally dead now (if you're a shareholder that is). While you're at it add a law that "pay is commensurate with earnings" to really clean things up. For instance, no CEO can earn more than X % of company earnings. Add no golden parachute clause to that law also. There. The world is fixed. ROFL. Stockholders everywhere REJOICE! ROFLMAO. A pipe dream I know. But hey, they're at least asking if the FED should get involved in taking action against CEO pay. Hmm...Saw that on CNBC today. Every CEO that threw their company down the toilet recently for billions in losses made 150Mil+ in golden parachutes (we'll see how big Hectors is when he leaves). Apparently you need to be hired as CEO, completely fail and you retire with 200Million (some were 225m-250mil!). It really pays to screw up as CEO. Worldcom, Citigroup, Merril l, HomeDepot, Pfizer etc..

Wait... AT has a front page? Lul wat?

 

[Zap]

Originally posted by: SickBeast
How does Hector Ruiz remain on as CEO while all these people are fired?

Apparently Hector has a nice severence package worked out in his contract, so to get rid of him will cost about as much as keeping him for another year or two. Investors don't always see things long-term, so they're keeping him because of short-term costs of dumping him.

Maybe.

 

[SickBeast]

Originally posted by: Martimus

Originally posted by: ayabe

Originally posted by: SickBeast
Engineers should not be over-managed. A single manager for 100 professional engineers is plenty. They should fire teh management. All of it. Then hire a few new ones.

How does Hector Ruiz remain on as CEO while all these people are fired? How do the shareholders put up with this?

1 person cannot effectively manage 100 people, not in the real world.

I agree, I can't imagine having to supervise more than 20 people effectively. Even at 20, that is cutting it pretty thin.

When I worked at one of the most prestigious architecture firms in Canada, there was a single office manager for over 100 people.

When you work as a professional, you need to be able to keep yourself in check. If your work is lousy, the client will either fire the firm you work for or else call up the manager to let them know you suck. At that point you get your pink slip and you're gone.

 

[cmv]

Where do you guys think this is going? For my purposes, Intel CPUs are what I'm using. I like the low power consumption of the Celeron-L 420 and the price/power ratio of the e2180 but I want AMD around to keep the pressure on Intel and to hopefully eclipse them again within a year or two.

For Linux users, the ATI merger has been disappointing. AMD hasn't handed over the documentation on programming the ATI chips. They've handed over some of it but not all and the parts missing are fairly large. The ATI drivers have always sucked under Linux (and IMHO, have not been all that great on Windows either) and this was a chance to start turning that around. Intel is pushing their graphics platform and driver development on Linux so soon ATI is going to be a 3rd tier solution for Linux users (non-games using Linux for desktop or HTPC solutions).

 

[Viditor]

Firstly, keep in mind that Hector's contract expires this month...so unless we see a renewal announced, his term of service is ended.

Second, Mike Magee has posted a copy of the internal memo on the cutbacks:
Inquirer

Fellow AMD employees,

In Q1 our revenue fell short of internal expectations in each of our businesses. And while we remain confident about our strategies and new product offerings this year, we must take action now to bring our cost structure in line with our performance.

Subsequently, we are moving forward with staff reductions of approximately 10 percent of AMD?s total workforce starting in mid-April and to be completed by the end of Q3. The reductions will be determined by a review of employee performance, skill requirements and functional needs.

As Hector and I have said, headcount reductions are among the last actions we would undertake to help AMD recover and achieve our objectives. The unfortunate truth is that we have been unable to grow our revenues to justify our cost structure, and the uncertain environment requires us to adjust our cost structure to match lowered revenue expectations.

While this action is a painful one, it is necessary in order to put us back on path to success. Thank you for your patience and cooperation, as we drive towards consistent profitability and a brighter future in the second half of this year.

Dirk

Third, let me add that (as I pointed out earlier) AMD has been increasing employee head count in anticipation of a successful Phenom launch. Obviously this turned out to not be the case, and we now see the reprocussions of that in this reduction.
Intel went through the same thing with Prescott (though obviously with a vastly larger number of people), so we should probably look at this as part of the natural order of things.

 

[dmens]

Originally posted by: SickBeast
When you work as a professional, you need to be able to keep yourself in check. If your work is lousy, the client will either fire the firm you work for or else call up the manager to let them know you suck. At that point you get your pink slip and you're gone.

guess most engineering firms don't have professional environments then.

 

[Phynaz]

Third, let me add that (as I pointed out earlier) AMD has been increasing employee head count in anticipation of a successful Phenom launch

Hey Information Minister, repeating yourself doesn't make it true.

Just ask all the ATI people that were let go.

Of course I can't figure out why you would staff up for product launch either. Did AMD hire a couple of thousand marketing people?


But here's something for you to chew on:

AMD has ~25% of the cpu market, some (dropping) percetage of the GPU market, but only 20% of the headcount of Intel. In theory they should be more efficient and have higher productivity and profit ratio than Intel.

I guess AMD's manufacturing process isn't all that after all.

 

[Viditor]

Originally posted by: Phynaz

Third, let me add that (as I pointed out earlier) AMD has been increasing employee head count in anticipation of a successful Phenom launch

Hey Information Minister, repeating yourself doesn't make it true.

I figured that even an aspiring Ayatollah such as yourself could look up simple stats as these...

Of course I can't figure out why you would staff up for product launch either. Did AMD hire a couple of thousand marketing people?

Hmmm...could it be maybe they were opening a whole new Fab and several new lines in their existing Fab? COULD be...

But here's something for you to chew on:

AMD has ~25% of the cpu market, some (dropping) percetage of the GPU market, but only 20% of the headcount of Intel. In theory they should be more efficient and have higher productivity and profit ratio than Intel.

I guess AMD's manufacturing process isn't all that after all.

Ummm...firstly, while I don't mean to step on your long term Intel enthusiasm, AMD's marketshare has been increasing for a year now.

To help you out with your understanding on the head counts, Intel sells products into far more markets than AMD.
Software, network controllers, memory, etc...

 

[Phynaz]

To help you out with your understanding on the head counts, Intel sells products into far more markets than AMD.

So, in other words AMD needs more people than Intel to do the equivalent amount of work. You said it, not me.

Or we could look at AMD's expenses, which in 2007 were 148 percent of revenue, while Intel was at 79% of revenue.

Want to go further back? 2006 expense ratio was 101% of revenue. 2005 was 96%. Looks like productivity is really soaring there at AMD.

Don't worry I understand everything just fine.

 

[Viditor]

Originally posted by: Phynaz

To help you out with your understanding on the head counts, Intel sells products into far more markets than AMD.

So, in other words AMD needs more people than Intel to do the equivalent amount of work. You said it, not me.

Or we could look at AMD's expenses, which in 2007 were 148 percent of revenue, while Intel was at 79% of revenue.

Don't worry I understand everything just fine.

I can see that you DON'T understand...
Your mistake is in the line "equivalent amount of work". How many Fabs is Intel opening this year?
What percentage of the Intel workforce is allocated to processers?
How many discrete graphics cards is Intel making next month?
How much memory is AMD producing?
How many compilers is AMD writing?

You are trying to compare apples to mangos...

 

[Idontcare]

Originally posted by: Phynaz
I guess AMD's manufacturing process isn't all that after all.

At the risk of becoming part of yours and Viditors engaging back and forth conversation...I will comment that unless Intel was piss-poor inefficient in developing their manufacturing processes then AMD's processes should always be considered "not all that" in comparison.

4X the R&D budget does wonders, its inexcusable if it doesn't.

The shoe really should be on the other foot...Intel shareholders ought to be asking why Intel finds it necessary to spend so gawd-dam much money to outclass such a minor rival competitor by so little margin (manufacturing process wise).

 

[pm]

Gradual cut sounds a lot worse than immediate cut. Am I wrong?

From a workers perspective, it's generally better because it factors in attrition (ie. people leaving). If you freeze hiring at a high-tech company, during bad times one can expect 3-5% annual attrition. So a 10% gradual cut means that fewer workers are forced to leave to meet the 10% "goal" and that's generally a good thing for workers. It's worse for morale though since, rather than getting it over in one clean cut, instead workers have a bit of a feeling of a guillotine hanging over them. I've seen clean cuts - where one day you show up and a bunch of people disappear - and gradual cuts, where over months people leave. I prefer gradual (well, I prefer none at all... layoffs suck... but if I had to choose my poison).

I have plenty of friends at AMD. As someone who experienced Carly's layoffs at HP, and Intel's layoffs several years ago, the employees of AMD have my sincere sympathy.

 

[bryanW1995]

Originally posted by: CTho9305

Originally posted by: SlowSpyder
I know everyone here dumps on Theinquirer.net, but they did call this one correctly.

They call a lot of stuff correctly, or close to correctly. People in industry seem to consider them a much more valuable source than the average ATer does.

yeah, it's kind of like men in black where tommy lee jones reads the natl inq for news on aliens...

 

[bryanW1995]

Originally posted by: Yoxxy
Hector stays in business because everyone always blames the CEO, as they blame the president on the economy.

In fact it is the engineers that have doomed the company by going to a single die quadcore.

45nm can not come fast enough.

yes, but the engineers can only recommend things like that. The company officers are the ones who made the bad decision. Of course, if intel has major problems with nehalem and amd kicks ass with their high-k 45nm quads then this could all be quickly forgotten, too...

 

[Phynaz]

Originally posted by: Idontcare

Originally posted by: Phynaz
I guess AMD's manufacturing process isn't all that after all.

At the risk of becoming part of yours and Viditors engaging back and forth conversation...I will comment that unless Intel was piss-poor inefficient in developing their manufacturing processes then AMD's processes should always be considered "not all that" in comparison.

4X the R&D budget does wonders, its inexcusable if it doesn't.

The shoe really should be on the other foot...Intel shareholders ought to be asking why Intel finds it necessary to spend so gawd-dam much money to outclass such a minor rival competitor by so little margin (manufacturing process wise).

But you see, Intel doesn't spend that much. Again, as a percentage of revenue, Intel spends, and pretty much has always spent, 15% on R&D. AMD is running at 31%, and has been increasing for the last four years.

So, I would ask, why does AMD need so much money for what is basically a one product company, while Intel can spend proportionally less for it's entire portfolio of products?

 

[Phynaz]

You are trying to compare apples to mangos...

No, I'm comparing one semiconductor manufacturing company to another.

Would you like to compare to another company?
Nvidia, total expenses 80 percent of revenue, R&D 17% of revenue.

Oh, and Intel will make the same number of discreet graphics cards in 2008 as AMD: Zero.

AMD doesn't make graphics cards.

Since this is turning into another one of the Viditor is always right threads, I'll be leaving it alone now. You can have the last word.

Perhaps you would like to spend that last word putting a positive spin on both S&P and Moody putting AMD on negative credit watch today. AMD bonds are already rated "junk" and look to be sinking further.

 

[rchiu]

Originally posted by: Phynaz

Originally posted by: Idontcare

Originally posted by: Phynaz
I guess AMD's manufacturing process isn't all that after all.

At the risk of becoming part of yours and Viditors engaging back and forth conversation...I will comment that unless Intel was piss-poor inefficient in developing their manufacturing processes then AMD's processes should always be considered "not all that" in comparison.

4X the R&D budget does wonders, its inexcusable if it doesn't.

The shoe really should be on the other foot...Intel shareholders ought to be asking why Intel finds it necessary to spend so gawd-dam much money to outclass such a minor rival competitor by so little margin (manufacturing process wise).

But you see, Intel doesn't spend that much. Again, as a percentage of revenue, Intel spends, and pretty much has always spent, 15% on R&D. AMD is running at 31%, and has been increasing for the last four years.

So, I would ask, why does AMD need so much money for what is basically a one product company, while Intel can spend proportionally less for it's entire portfolio of products?

What portfolio are you talking about? 3/4 (15 billion out 20 billion ) of Intel's revenue is in processor.

Intel doesn't breakout their revenue for their graphic business, but AMD's graphic business is most likely bigger, at least more advanced then Intel's. AMD is also in mobo chipset business as well. It is hardly "one product" company.

 

[CTho9305]

Originally posted by: SickBeast
When I worked at one of the most prestigious architecture firms in Canada, there was a single office manager for over 100 people.

When you work as a professional, you need to be able to keep yourself in check. If your work is lousy, the client will either fire the firm you work for or else call up the manager to let them know you suck. At that point you get your pink slip and you're gone.

I laughed when I read this

Originally posted by: pm

Gradual cut sounds a lot worse than immediate cut. Am I wrong?

From a workers perspective, it's generally better because it factors in attrition (ie. people leaving). If you freeze hiring at a high-tech company, during bad times one can expect 3-5% annual attrition. So a 10% gradual cut means that fewer workers are forced to leave to meet the 10% "goal" and that's generally a good thing for workers. It's worse for morale though since, rather than getting it over in one clean cut, instead workers have a bit of a feeling of a guillotine hanging over them. I've seen clean cuts - where one day you show up and a bunch of people disappear - and gradual cuts, where over months people leave. I prefer gradual (well, I prefer none at all... layoffs suck... but if I had to choose my poison).

I think the resulting morale loss and "I'm not going to work long hours since I might not be here in a few months anyway" attitude is probably very harmful to productivity. I'd rather know for sure whether or not I need to ask you for a job .

Originally posted by: some fanboy
Nvidia, total expenses 80 percent of revenue, R&D 17% of revenue.

And how much has nvidia contributed to the state of the art in microprocessor fabrication?

 

[dmens]

Originally posted by: CTho9305

Originally posted by: SickBeast
When I worked at one of the most prestigious architecture firms in Canada, there was a single office manager for over 100 people.

When you work as a professional, you need to be able to keep yourself in check. If your work is lousy, the client will either fire the firm you work for or else call up the manager to let them know you suck. At that point you get your pink slip and you're gone.

I laughed when I read this

yeah, reality is multiple hierarchies of email crunching management for every engineer, plus talent-less assclowns hanging around and getting promoted for going after limelight side-projects while neglecting their actual jobs.

should've been a doctor.

 

[liebremx]

Originally posted by: Phynaz
But here's something for you to chew on:

AMD has ~25% of the cpu market, some (dropping) percetage of the GPU market, but only 20% of the headcount of Intel. In theory they should be more efficient and have higher productivity and profit ratio than Intel.

I guess AMD's manufacturing process isn't all that after all.

So when you take into account that AMD also develops IPF CPUs, optics, ethernet controllers, compilers, motherboards, WiFi chips, storage devices, has lots of fabs, ..., etc, etc... oh wait! they don't! So maybe that's where the difference in headcount with Intel is... silly me.

Great logic. For the sake of the next CPUs coming from both companies I hope you don't work for any of them.

Originally posted by: dmens

yeah, reality is multiple hierarchies of email crunching management for every engineer

LOL.. gotta love those "Great job everyone" e-mails (and its variants).

 

[SickBeast]

Originally posted by: dmens

Originally posted by: SickBeast
When you work as a professional, you need to be able to keep yourself in check. If your work is lousy, the client will either fire the firm you work for or else call up the manager to let them know you suck. At that point you get your pink slip and you're gone.

guess most engineering firms don't have professional environments then.

It must depend on the specialty/field. A good friend of mine is a mechanical engineer and he tells me they don't have more than one manager for every 20 engineers.

TBH with that kind of work, if you're no good it really shows. Whatever you produce will be terrible if you don't know what you're doing. I don't know why they need so many managers.

 

[Martimus]

Originally posted by: SickBeast

Originally posted by: dmens

Originally posted by: SickBeast
When you work as a professional, you need to be able to keep yourself in check. If your work is lousy, the client will either fire the firm you work for or else call up the manager to let them know you suck. At that point you get your pink slip and you're gone.

guess most engineering firms don't have professional environments then.

It must depend on the specialty/field. A good friend of mine is a mechanical engineer and he tells me they don't have more than one manager for every 20 engineers.

TBH with that kind of work, if you're no good it really shows. Whatever you produce will be terrible if you don't know what you're doing. I don't know why they need so many managers.

To be honest, when I worked at Delphi, my supervisor had 5-6 engineers under her, and her manager only had 2-3 supervisors working for him. When I was at ASL (Automotive Systems Laboratory), it was more like 2-4 engineers per supervisor. Now that I work for the Department of Defense, it is 20 or more employees per supervisor. We are nowhere near as efficient as we were at either Delphi or ASL though. (ASL was the most efficient, even though it had the highest ratio of management to workers; or perhaps because of that)

 

[Viditor]

Originally posted by: Phynaz

You are trying to compare apples to mangos...

No, I'm comparing one semiconductor manufacturing company to another.

Only in the most vague way...most of those semiconductors are in different markets entirely.
For example, Intel has 15 Fabs but only 4 of them can manufacture modern (65nm or smaller) CPUs.

Would you like to compare to another company?
Nvidia, total expenses 80 percent of revenue, R&D 17% of revenue.

Another good example of apples and mangos...a Fabless design company. But where did R&D come into this??? You went from number of employees to R&D like they were the same thing...maybe that's the problem then.

Oh, and Intel will make the same number of discreet graphics cards in 2008 as AMD: Zero.

AMD doesn't make graphics cards.

You did know that I meant discrete graphic chips (AMD has shut down the Radeon line), but whatever...

 

[Roy2001]

Originally posted by: Yoxxy
Hector stays in business because everyone always blames the CEO, as they blame the president on the economy.

In fact it is the engineers that have doomed the company by going to a single die quadcore.

45nm can not come fast enough.

You are totally WRONG!

When Conroe 2.66G benchmark was revealed, AMD should be well prepared. But no, he did not. Every quarter result turns to be different than what he had said.