AMD today 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, in the press release. “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 operational savings, primarily in operating expense, 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.
Source: AMD
If this is hope and change, I’ll have the practicality and stasis instead. And, make it a double!
Amen.
Sad state of affairs when instead of increasing their market and creating new exciting products, they cut off the people who could help them to prosperity. The world spirals down by this type of short term thinking.
Does Apple lay off when things get tough? No, they dig in and produce iPhones and iPads and Apple TVs.
Yes they do.
Steve took a chainsaw to products and staff when he came back. (Rightfully so)
And layoffs around 1980 and a big one in ’85.
How much of the decline in AMD profits can be attributed to Apple’s success and the decline in PC purchases?
Pure MBA-speak, a whole lot of nothing.
No visionary at the helm when u hear pukes up MBA drivel like that.
Stick a fork in them
Agreed. Pure manageobabble.
“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”……… “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.”
It’ll never work, because he didn’t say, “going forward.”
Sadly, AMD is just not able to compete with Intel.
Intel’s Sandy Bridge architecture beats AMD’s offering, and Intel’s Ivy Bridge just plain blows away anything AMD can produce.
AMD should probably abandon the x86 architecture and move to ARM. Integrate ARM cores with GPU cores and help Nvidia build a competing infrastructure around this integrated architecture. With enough critical mass, it just might kill of x86 in the long run. To the benefit of Nvidia and AMD.
Let me run AMD. I’ll take out Intel.
All of the sudden, Intel started making computer chips that didn’t suck (Core Duo), and AMD could not respond quickly enough and has yet to catch up. It was as if you were competing against McDonald’s in fast food, then all of the sudden, McDonald’s started making food that actually tasted good and had nutritional value. How does anyone compete with that? They were already dominating the world when everything they sold was crap. Then they are suddenly years ahead in product quality. Very unfortunate for AMD!