More layoffs coming to AMD?

[Sweepr]

With a new $500 million credit line and questions if its profitability is sustainable, layoffs may be on the horizon.

It’s no secret that AMD, while profitable, is in a financially perilous situation.

This past quarter the company returned to profitability, with a few caveats: it sold its Austin headquarters and is leasing it back from the bank, and revenues from consoles will slow to a trickle one the initial build up and shipment to channel has come and gone. The company is sustainable now, but future profitability is up in the air.

While the company has $1.2 billion in cash on hand, a multi-quarter downtick could erase those cash reserves entirely. In order to ensure AMD retains some “financial flexibility” the company has taken out a $500 million line of credit from a herd of lenders with Bank of America acting as the shepherd.

If the company sees itself running on credit in the near future it will no doubt need to reduce its headcount. Recently VR-Zone learned there is an “all hands” meeting scheduled for early December in Austin, with most staff from AMD’s worldwide offices flying in. Mass layoffs on the scale of November 2011 aren’t likely to happen, but CEO Rory Read will need to do something to make his company leaner if AMD falls back into the red.

More details will be available in December.

http://vr-zone.com/articles/layoffs-coming-amd/63736.html

 

[Lepton87]

I just hope they don't fire engineers, just marketing guys. They have horrible marketing anyway.

 

[inf64]

Already posted in this topic:
http://forums.anandtech.com/showthread.php?t=2353426

 

[Abwx]

Dont know but more fud coming to AT for sure....


Thats uncalled for
Markfw900
Anandtech moderator.

 

[SiliconWars]

This has been happening at AMD for as long as I can remember. They lay off a bunch of people then end up hiring more back. Headcount was back above 10300 last quarter, up more than 400 from Q2. This is them maintaining a tight ship and keeping OPEX down below $450m.

 

[Nothingness]

And no word on Intel laying off 300 people in Malaysia? So much bias

 

[Sequences123]

Companies lay off people. What's the big deal?

 

[Arachnotronic]

And no word on Intel laying off 300 people in Malaysia? So much bias

A major, highly profitable corporation laying off some workers in a packaging and test facility isn't a big deal. They're not cutting into their core R&D bone and are still hiring engineers/technical talent like crazy.

For AMD, which is barely profitable and just took out a $500M LoC to help it stay liquid, it's a much bigger deal.

Just remember...Intel made $3B in net profit in the most recent quarter. AMD sold $1.46B worth of product and earned $46M in net profit.

 

[Nothingness]

Yes, that's very different: AMD is trying to survive while the very profitable Intel is just playing the capitalistic game But that probably is my silly European mentality that makes me think that the latter behavior is potentially bad.

 

[USER8000]

Companies lay off people. What's the big deal?

Dunno,unless you are one of the people who are getting laid off(which would be kind of sucky TBH).

Apart from that it would not surprise me if people do have these weird fascinations which such things. I suppose it is the internet after all. Maybe they got bored of funny Cat pictures??

 

[nenforcer]

I'm not sure I'd say revenue from consoles will slow to a trickle. That will provide a steady income throughout the life of the deals which should be in the neighborhood of 100 million consoles (PS4 + XBOX One) until 2020 or so.

I'm guessing that since Sony and Microsoft own the tech inside that AMD's royalty payments for every console sold are identical in year 1 as they are in year 7. (despite manufacturing cost reductions).

The console manufacturers will have price decreases throughout the lifetime of the console which will encourage more people who don't own them to make the purchase later in its lifetime.

 

[frozentundra123456]

I'm not sure I'd say revenue from consoles will slow to a trickle. That will provide a steady income throughout the life of the deals which should be in the neighborhood of 100 million consoles (PS4 + XBOX One) until 2020 or so.

I'm guessing that since Sony and Microsoft own the tech inside that AMD's royalty payments for every console sold are identical in year 1 as they are in year 7. (despite manufacturing cost reductions).

The console manufacturers will have price decreases throughout the lifetime of the console which will encourage more people who don't own them to make the purchase later in its lifetime.

No one really knows, but the idea was that a lot of chips were sold to build up inventory in anticipation of very rapid sales at launch. Even if the price per unit sold stays the same, sales will slow down as the initial high demand get satisfied.

 

[Lonyo]

I'm not sure I'd say revenue from consoles will slow to a trickle. That will provide a steady income throughout the life of the deals which should be in the neighborhood of 100 million consoles (PS4 + XBOX One) until 2020 or so.

I'm guessing that since Sony and Microsoft own the tech inside that AMD's royalty payments for every console sold are identical in year 1 as they are in year 7. (despite manufacturing cost reductions).

The console manufacturers will have price decreases throughout the lifetime of the console which will encourage more people who don't own them to make the purchase later in its lifetime.

You think that Sony and AMD own the GCN and Jaguar tech AMD developed and have been using themselves in commercial products for years? (Well, GCN anyway).

I doubt it.

 

[Lonyo]

Yes, that's very different: AMD is trying to survive while the very profitable Intel is just playing the capitalistic game But that probably is my silly European mentality that makes me think that the latter behavior is potentially bad.

It is. Intel are just trying to survive too as their markets change and competition increases.
You are thinking in the old way of AMD vs Intel, and not the new way of Intel vs ARM.
Intel need to ensure their own survival going forward against new competitors which aren't AMD.

 

[sandorski]

"...financially perilous situation"

IOW, business as usual for AMD. I think their lineup looks pretty good right now. They have a lot of potential for steady revenue with their Console presence, but Mantle and soon to be released APUs both have great potential for generating increased Revenues.

 

[daveybrat]

I personally can't wait for Kaveri. Plan to make a nice HTPC/Light gaming pc out of one.

 

[inf64]

Doom and gloom posts like this have been with us since AMD bought ATi. Business as usual.

 

[mrmt]

Doom and gloom posts like this have been with us since AMD bought ATi. Business as usual.

And the company is healthy as ever, isn't it?

 

[USER8000]

Doom and gloom posts like this have been with us since AMD bought ATi. Business as usual.

Even before that. Tom Kurlack of Merrill Lynch said in 1990 AMD would be dead. It is still here nearly 24 years later.

 

[Homeles]

Even before that. Tom Kurlack of Merrill Lynch said in 1990 AMD would be dead. It is still here nearly 24 years later.

Industry layoff news is relevant, regardless of the company involved.

 

[PPB]

Then why some people were so quick to dismiss the Intel's ones?

 

[podspi]

Then why some people were so quick to dismiss the Intel's ones?

To be fair, weren't those layoffs caused by the shuttering of an outdated facility? There is a big difference between "We don't need this facility or these employees anymore" and "We really need these employees but we can't pay them so away they go"

 

[mode101wpb]

I just hope they don't fire engineers, just marketing guys. They have horrible marketing anyway.

We (Engineers) are often cut before others, I have been let go to things like this 3 times in my 15 year career.

 

[CHADBOGA]

Even before that. Tom Kurlack of Merrill Lynch said in 1990 AMD would be dead. It is still here nearly 24 years later.

And Sharikou Ph.D predicted bankruptcy for Intel by 2011. :awe:

 

[Arachnotronic]

And Sharikou Ph.D predicted bankruptcy for Intel by 2011. :awe:

I've run into Sharikook a couple of times on the web. Very unprofessional individual.