The axe falls at AMD as layoffs sweep through the company

Brian Ambrozy 3 Nov, 2011 at 11:44am ET Article published in Tech

Today AMD began announcing several layoffs. Up to 10% of its workforce may get the pink slip.

While AMD’s FirePro and Radeon GPU divisions have been knocking them out of the park with design and performance wins, their core CPU division has suffered a major blow to the prestige they earned in the 2000s, which was the last time they beat Intel in several key areas. The release and subsequent press thrashing that their new flagship CPU AMD FX (“Bulldozer”) received hasn’t gone unnoticed. Pundits have asked where AMD went wrong, and speculation ranges from fundamental design flaws to AMD PR shipping less-than-optimal motherboards to reviewers.

AMD’s APU and Fusion platform continue to score big wins with netbook and small form-factor OEMs, but they still need a competitive high-end CPU to go toe-to-toe with Intel’s Sandy Bridge-E and upcoming Ivy Bridge, which are almost certain to retain Intel’s performance crown. According to a now-former AMD employee that we spoke with, “All the meeting rooms are booked solid by HR” as the layoffs continue to roll through the shaken company. An official announcement is expected soon and we’ll be covering this story as it unfolds.

UPDATE 2:48PM EST:

Some of the AMD folks that have gotten laid off today include Director of the Products Group, senior engineer Carrell Killebrew; PR Manager Antal Tungler; PR Rep Bernard Fernandes; FirePro Product Marketing Managers Robert Miller and Lidia Gentilucci; Corporate VP of Strategy and Fellow Patrick Moorhead; Margaret Franco, VP of Marketing; and John Volkmann, Corporate Marketing Fellow.

We’re expecting many, many more names before this week is out.

UPDATE: 3:17PM EST:

A letter from AMD CEO Rory Read found on Pastebin:

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

Update 4:52pm EST:

The AP is reporting that AMD says it is laying off 1400 employees, more than the original 1000 that Mr. Read alluded to.

Update 3:01pm EST 11/04/2011:

We found out that head of FirePro product marketing Craig Lakey, and FirePro product management for entry level and mid-range discrete products Hao Pham were both let go yesterday.

Update 10:15pm EST 11/04/2011:

We just got an email from John Swinimer, letting us know that he was let go as well. He was PR manager for GPUs.

Comments

3 Nov 2011 ~ 12:11pm NiGHTS Terrible thing to have happen - having been on the receiving end of the axe my condolences to those that are caught by it. It's terrible knowing the whole thing was out of your control to begin with and there wasn't anything you could have done differently to change it.
3 Nov 2011 ~ 12:12pm Cliff_Forster Still manage to make about 100 million profit for the quarter despite failing to deliver on the company's biggest product launch, so you layoff 10% off the workforce?

It seems Rory Read is playing the most basic page out of the old investor appeasement playbook? I'm really disappointed in AMD right now. Chump move.
3 Nov 2011 ~ 12:43pm Garg Yeah, I thought things were going well. I don't know how making a bunch of money translates into layoffs. I mean, they were running huge losses this time last year.

This is why shareholders suck.
3 Nov 2011 ~ 12:48pm UPSLynx Fuck.
3 Nov 2011 ~ 12:57pm RyanMM The line between a publicly traded company and the spawn of Satan is a very thin one. YAY WALL STREET.

Everyone affected by the layoffs has my sympathy and best wishes that this will end up a net positive.
3 Nov 2011 ~ 2:24pm ardichoke

Cliff_Forster wrote:

Still manage to make about 100 million profit for the quarter despite failing to deliver on the company's biggest product launch, so you layoff 10% off the workforce?

It seems Rory Read is playing the most basic page out of the old investor appeasement playbook? I'm really disappointed in AMD right now. Chump move.

Whirlpool did the same thing this quarter. Made huge profits, but they weren't huge enough so they're laying off a bunch of people.

And people wonder why Occupy is spreading, not dissipating.
3 Nov 2011 ~ 2:29pm Cliff_Forster Robert, Bobby, I hope this day passes with as little stress as possible for you both. I've worked at places while the axe was being dropped all day long. Not fun at all, you two have my complete empathy. Even if when you make it through the day, the lousy feeling it leaves you with, it's just hard to describe, sickening. My thoughts are with you brothers.

As for Rory Read, we all know what motivates. Nothing like missing the mark on your stock price targets missing millions in potential executive compensation to keep your mansion payment up to date. If you value the options missed at current stock over the three years, I just have to wonder how many jobs his potential fifteen million or so in bonus compensation may have saved. I suppose that's the motivation to do whatever is necessary to drive value for the investor, but when so many decent hard working people are paying such a high price? It's just not fair. I know no corporation is above this, but part of me hoped AMD could be. I'd understand if they were still posting losses, but this, it's just stabbing at getting the stock price near $7 a share so the CEO can cash in. No doubt in my mind.
3 Nov 2011 ~ 2:32pm RyanMM CEO pay in this country is fucked. If Occupy achieves only one thing, bringing them down to the global average would be spectacular.
3 Nov 2011 ~ 2:34pm ardichoke

RyanMM wrote:

CEO pay in this country is fucked. If Occupy achieves only one thing, bringing them down to the global average would be spectacular.

A combination of bringing CEO pay down and worker pay up would be even better. Either way, the gap is INSANE and needs to be closed.
3 Nov 2011 ~ 3:09pm RyanD The AMD layoff is a terrible thing. Someone close to me was laid off this morning. However, posters here simply don't understand how markets and capitalism work. Comments like "shareholders suck" and accusations that the lay offs are so the CEO can get a bigger mansion are rooted in pedestrian logic. Shareholders provide the capital that allowed AMD to exist in the first place and grow to 12,000 people. Keep your comments to yourself if you don't understand what you're talking about.
3 Nov 2011 ~ 3:11pm ardichoke I would like to state, for the record, that I am NOT the RyanD that spewed the above ignorance.
3 Nov 2011 ~ 3:26pm NiGHTS

ardichoke wrote:

Whirlpool did the same thing this quarter. Made huge profits, but they weren't huge enough so they're laying off a bunch of people.

And people wonder why Occupy is spreading, not dissipating.

http://online.wsj.com/article/SB10001424052970203687504577003362235867958.html

For the third quarter Whirlpool reported a profit of $177 million, or $2.27 a share, up from $79 million, or $1.02, a year earlier. But that increase was due to larger benefits from tax credits in the U.S. and Brazil. Operating profit plunged 42% to $136 million. Sales edged up 2.3% to $4.63 billion.

Whirlpool, the world's biggest appliance maker, and No. 2 Electrolux are being battered from several directions. Sales gains in Asia and Latin America are slowing and aren't sufficient to make up for sluggish demand in the U.S. and Europe. Steel and other raw-material costs are up from a year ago. Price-cutting promotions have hurt profits without generating much new demand. At Whirlpool, tax credits that have propped up profits in recent years are running out.

You aren't going to continue to operate at a specific level with a certain number of employees if you can see a recessed demand coming - plants were already operating below ideal capacity. Something has to give. We can't fire from the hip without taking a closer look to understand what is actually going on. Numbers don't tell the whole story.
3 Nov 2011 ~ 3:31pm Annes

RyanD wrote:

The AMD layoff is a terrible thing. Someone close to me was laid off this morning. However, posters here simply don't understand how markets and capitalism work. Comments like "shareholders suck" and accusations that the lay offs are so the CEO can get a bigger mansion are rooted in pedestrian logic. Shareholders provide the capital that allowed AMD to exist in the first place and grow to 12,000 people. Keep your comments to yourself if you don't understand what you're talking about.

Could you shed some light on the situation then? Since you seem to know the actual reasons?
3 Nov 2011 ~ 3:32pm RootWyrm

RyanD wrote:

The AMD layoff is a terrible thing. Someone close to me was laid off this morning. However, posters here simply don't understand how markets and capitalism work. Comments like "shareholders suck" and accusations that the lay offs are so the CEO can get a bigger mansion are rooted in pedestrian logic. Shareholders provide the capital that allowed AMD to exist in the first place and grow to 12,000 people. Keep your comments to yourself if you don't understand what you're talking about.

Okay, how about the guy who does know what he's talking about? (That would be me, by the way.)

The shareholder trigger argument is in fact, spot on, period. Shareholders are not happy unless they are seeing absolute maximum profit on their investment, period. MBAs are taught, erroneously, that the quickest way to improve profits is to reduce headcount. Guess who the typical institutional investors screaming for blood are. Why? Because employees are highest cost with highest risk.

What we are not seeing is the financial impact of Bulldozer going into a ditch; that will be seen when AMD announces Q3 financials. (Or is it Q4? I honestly don't track everybody's FYs. Either way. Next quarter.) This is likely to have a significantly negative impact not only on AMD's current bottom line, but also likely to turn outlook negative, since the next generation Opteron is based on the same cores.

I can tell you from testing that Bulldozer versus ERP and BI systems is a recipe for disaster, doubly so for virtualized environments. (We've done two tests where we were able to basically overload the PRF due to excessive FMAC queuing.) This is something that AMD knows, and something that is going to impact their bottom line. They're either going to have to spin new revisions for Opteron, which is extremely expensive, or take a sales hit, also extremely expensive.

So what's the quickest way to cut costs to improve profitability? Lay people off. Bam - several million dollars just evaporated from the costs column. Shareholders like it because stupidly, they want profits up short term so they have the option to unload shares at a profit. C-levels like it because stupidly, they believe short-term profits and happy shareholders are all that matters. So yes, it's not just pay that's a disasterpiece, it's the entire way of doing business these days. If Boeing was run like this, you'd be taking the train everywhere to this day.

To put this in perspective though, as to why it is so stupid, we need to look at WHO was laid off. We have a lot of people in marketing and a lot of people in engineering. I shouldn't have to explain why laying off the people who sell your product and the people who can fix the problems is incredibly stupid. If they were realizing efficiencies in say, accounting, and laid off 10% of the people because they had nothing to do, then yes. That's a sound business decision as much as it sucks for the folks who get the axe. Axing the people who are critical to fixing the problems and driving your sales is about the most boneheaded move you can make.
3 Nov 2011 ~ 3:37pm geeko stupido Yeah.. what can you expect from a new CEO? a big bonus is waiting for his action! AMD is already in a difficult position to recruit the potential engineers, now even worse...
3 Nov 2011 ~ 3:45pm RyanD RootWyrm, if you want to make an informed argument, based on knowledge of the company, that shareholder interests are too short-sighted in this specific case, then by all means I will listen to you and give your argument the respect I'm sure it deserves. What I have no patience for is people ignorantly bashing capital markets without understanding how virtually every great business in this country has ever been built.
3 Nov 2011 ~ 4:02pm RootWyrm

RyanD wrote:

RootWyrm, if you want to make an informed argument, based on knowledge of the company, that shareholder interests are too short-sighted in this specific case, then by all means I will listen to you and give your argument the respect I'm sure it deserves. What I have no patience for is people ignorantly bashing capital markets without understanding how virtually every great business in this country has ever been built.

Then you should take the time to understand the fact that the capital markets as they exist today, are completely broken and non-functional, period. Don't like it? Tough. That's the fact.

The greats in this country are companies like Ford, Boeing, Lockheed-Martin, and Hughes. Yes, these are all old companies which are now cruising on because of their behemoth size. The fact is that none of these companies would have gotten here if they hadn't done something no business today seems even remotely capable of: saying "fuck the short-term, we're looking 10 years down the road." Today's ignorant shareholders don't tolerate that. They are special snowflakes who the company owes profits now.

As I said: you would be taking the train everywhere if Boeing ran their business like that or was subjected to today's broken markets. The 747 would not exist, period. Boeing took a huge bet in 1963, starting with something called the CX-HLS. This cost them millions of dollars and never went to production. That turned into the 747. Boeing spent hundreds of millions of dollars between 1963 and 1966 when Pan Am placed their $525M order, and went to multiple banks to keep funding the company's operations. These operations included hiring thousands of people to design, test, and build the 747. Boeing nearly went bankrupt twice between '63 and the mid 70's as a result of the 747 project. But they knew that even if they went into a hole that deep, for that long, it would pay off in the long run - and it did. The 747 remains one of their most profitable aircraft ever, and they held a virtual monopoly on large airliners for 35 years. Because they looked at the 10 year outlook instead of the 1 year outlook, everybody knows what a 747 is, who makes it, and investors and the company realized excellent profits.

Try doing that today. I dare you. Go to the "markets" and tell them you need $1M, you have a solid plan, but it'll take 5 years for them to see a return. Nobody will talk to you. They will throw you out. (VCs don't count, and don't get me started on some of the crap they do. I have firsthand experience.) It's all "either show me profit next quarter or get out." They don't want to talk to you about something that will show them reasonable profits - if it isn't a virtual cash printing press, they aren't interested. If they can't IPO it for stupid money, no deal.

If AMD was able and willing to take some losses, I have no doubt that they could take their engineering teams and produce a processor that would beat the crap out of Intel's best any day of the week. But it would take them 3 years. And in those 3 years, the CEO would just get the boot from shareholders demanding their money right the hell now. They don't want stable profits in 3 years that last for 5 years, even though that's going to net them more money. They want 20% margins on everything and they want it this quarter or you're fired.
3 Nov 2011 ~ 4:03pm Kwitko

RootWyrm wrote:

overload the PRF due to excessive FMAC queuing

For us non-enterprise systems ninjas, what does this mean?
3 Nov 2011 ~ 4:13pm primesuspect Give him twenty more years, and he'll be malfing tibs on polycarbs
3 Nov 2011 ~ 4:16pm RyanD RootWyrm, if you want to make an informed argument, based on knowledge of the company, that shareholders are being too short sighted in this situation, by all means I will listen to your argument and give it the respect I'm sure it deserves. What I have no patience for is people who don't understand capital markets bashing the very system that has built virtually every great (job providing) company this nation has seen in the last century.
3 Nov 2011 ~ 4:25pm RyanD RootWyrm, your argument has holes. You say try doing that today and nobody will talk to you, but your own example proves you wrong. The 787 has been FAR more expensive, time consuming and, by some measures, riskier, than the 747 was. But guess what, shareholders of 2011 are fuming its development with their capital because if their risk pays off, they hit the jackpot, long-term. Just calm down and think about this stuff. People always complain that we need to return to the good 'ole days, but guess what, today, people in every walk of life in this country enjoy a higher standard of living than ever, even in the middle of this long, awful recessionary period. So take a deep breath and don't be sucked into simple logical fallacies.
3 Nov 2011 ~ 4:27pm Tushon

RyanD wrote:

RootWyrm, if you want to make an informed argument, based on knowledge of the company, that shareholders are being too short sighted in this situation, by all means I will listen to your argument and give it the respect I'm sure it deserves. What I have no patience for is people who don't understand capital markets bashing the very system that has built virtually every great (job providing) company this nation has seen in the last century.

Even I don't consider add two words to something you have already said a response to RW.
3 Nov 2011 ~ 4:41pm sharkydart

RyanD wrote:

... Keep your comments to yourself if you don't understand what you're talking about.

Don't you know this is the internet?

That having been said; it seems to me that RootWyrm has strong arguments. Plus; since when are shareholders supposed to have non-public knowledge of the company (which, to you is a requirement before making an "informed argument")? If I were a shareholder (without insider info), lay-offs would give me less faith in my holdings (compared to a potential response of an intelligent strategy of marketing and pricing in response to product reviews).

Also seems kind of ridiculous that this sentence simultaneous proclaims that the speaker *does* know what they are talking about... Trying to waltz in and drop knowledge on us "uninformed" with a guest account is trollish. That having been said, it is futile to argue with a troll.
3 Nov 2011 ~ 4:48pm primesuspect Story updated.
3 Nov 2011 ~ 4:53pm ardichoke Man, trollfights are way more amusing when you're not one of the ones participating. I should do this more often.

Also, wow, I don't think I've ever seen such a concentration of buzzwords in a single place before... and I've taken business courses. Thats some pretty impressive CEOing.
3 Nov 2011 ~ 5:00pm RyanD RootWyrm, you're making hefty intellectual arguments and backing them up with level 1 logic and fluff. Think deeper.
3 Nov 2011 ~ 5:01pm BuddyJ Looks like Rory is a Lv 16 CEO with a +16 in Communication (Buzzwords)
3 Nov 2011 ~ 5:11pm Annes

Buddy J wrote:

Looks like Rory is a Lv 16 CEO with a +16 in Communication (Buzzwords)

The best part is that he is SO informed that he can't tell us where or why we're wrong. Just saying "no, you're wrong, stupid" and nothing else is THE BEST.
3 Nov 2011 ~ 5:19pm PirateNinja "MBAs are taught, erroneously, that the quickest way to improve profits is to reduce headcount. "

I was never, ever, ever taught that.
3 Nov 2011 ~ 5:25pm Tushon

PirateNinja wrote:

"MBAs are taught, erroneously, that the quickest way to improve profits is to reduce headcount. "

I was never, ever, ever taught that.

But you surely understand what he is saying.
3 Nov 2011 ~ 5:32pm cola

RyanD wrote:

RootWyrm, you're making hefty intellectual arguments and backing them up with level 1 logic and fluff. Think deeper.

I want my brain inside you?
3 Nov 2011 ~ 5:36pm PirateNinja

Tushon wrote:

But you surely understand what he is saying.

Yes you're right. Sorry, this whole situation sucks.
3 Nov 2011 ~ 6:28pm QCH The "buzzwords" in that memo from AMD CEO Rory... WOW... Layoffs do not strengthen the "fighting spirit"... layoffs kill the morale of a company. Those that left are not happy, those that remain lose friends and co-workers AND have to pickup the extra work. Then they have to worry that there might be further rounds of layoffs. Not a smart move AMD.
3 Nov 2011 ~ 6:34pm csimon I hope you guys getting the layoff ticket go straight to nVidia with your resume and get the job.
3 Nov 2011 ~ 6:47pm primesuspect

QCH wrote:

The "buzzwords" in that memo from AMD CEO Rory... WOW... Layoffs do not strengthen the "fighting spirit"... layoffs kill the morale of a company. Those that left are not happy, those that remain lose friends and co-workers AND have to pickup the extra work. Then they have to worry that there might be further rounds of layoffs. Not a smart move AMD.

That's what I was going to say, Q. The people who are left are usually terrified that it could just as easily be them next. I remember a few years back when my dad's company was going through massive layoffs. He was losing sleep at night, his blood pressure went up, and he was having nightmares about it. And his job was one of the "safe" ones.

He didn't get laid off in the end, but those few months were brutal for him.
3 Nov 2011 ~ 7:01pm ardichoke You don't convince people to take the kind of big leaps that can make your company a leader with mass layoffs. You end up making them scared to take any sort of risk, and without risk there's no reward.
3 Nov 2011 ~ 8:16pm QCH AMD... offer a buyout. That is not the best but so much better than just laying off staff.
3 Nov 2011 ~ 8:21pm fatcat Axe the CPU division and go back to ATi. Even better, name the APU's 3dfx
3 Nov 2011 ~ 10:19pm BuddyJ Theo at BSN says the complete product review support team got hit by this too... anyone know if that means Damon Muzny got hit too? I always liked dealing with him. The story here just gets worse and worse
3 Nov 2011 ~ 10:20pm mm While I sympathize with those who are getting laid off I must point out that if you are really upset over shareholders and executive pay... then don't buy that companies products.

Eventually the company will either change their ways to make money or go out of business. Frankly, I think all these complaints over shareholder/executive pay is based solely on envy. In the most basic of nutshells, people are just ticked off because they want more money for less effort.

There is nothing stopping any of you complainers from becoming shareholders or advancing to become an executive of a major company. But that takes a lot of work and effort, more than most people are willing to put into it.

The only glass ceiling is in your own minds. A job is not a RIGHT in this country. So get over it and grow up.
3 Nov 2011 ~ 10:27pm primesuspect

Buddy J wrote:

Theo at BSN says the complete product review support team got hit by this too... anyone know if that means Damon Muzny got hit too? I always liked dealing with him. The story here just gets worse and worse

Damon left for Dell some months back.
3 Nov 2011 ~ 10:29pm Ryder With Breaking and Exclusive news... LOL
3 Nov 2011 ~ 10:41pm Garg I almost fed a troll, but I resisted. Proud of myself.
3 Nov 2011 ~ 10:41pm cola

mm wrote:

While I sympathize with those who are getting laid off I must point out that if you are really upset over shareholders and executive pay... then don't buy that companies products.

Eventually the company will either change their ways to make money or go out of business. Frankly, I think all these complaints over shareholder/executive pay is based solely on envy. In the most basic of nutshells, people are just ticked off because they want more money for less effort.

There is nothing stopping any of you complainers from becoming shareholders or advancing to become an executive of a major company. But that takes a lot of work and effort, more than most people are willing to put into it.

The only glass ceiling is in your own minds. A job is not a RIGHT in this country. So get over it and grow up.

Excuse me, but I believe you're wrong. In today's world it really isn't possible to move up to he highest echelons of corporate business you need connections and for those to form it would take decades (though with quite a few people, they are born into a certain level of connectedness), and the amount of variables involved in climbing the corporate ladder all the way to the top make it so that only a very small percentage of people can actually get there. If it was as simple as your "hard work and determination" approach, then judging from the caliber of people we have in this country, the wealth of this nation would be distributed quite differently.

Secondly, it's just plain rude to call everyone a complainer, name calling is childish and thusly I'm going to treat you like a child. True, people want more money for less effort, but envy isn't what is driving these people, it's more than likely outrage. A company that makes millions in profits shouldn't have to cut out as many people as are being at the moment.

Third, just refraining from buying a company's products, though it sounds good in theory, is much harder to institute practically. I'll use Walmart as an example as it's much easier to get my point across with it. Imagine yourself saying: "I don't support Walmart's treatment of it's employees, so until they change that I won't buy products from there." While you yourself might not go, does one person abstaining from going there make a dent in their massive pool of regular customers? Does you stopping make others around you stop? How many products are somehow funded or influenced by Walmart? The list goes on. The only real way to make a difference would be some form of organized action on a much greater scale than a single person. So simply boycotting a major industry giant isn't going to limit their bottom line significantly enough to warrant them changing.

Finally, you're off topic, this is about AMD and their recent actions, and people's feelings about it. If you'd like, join the site and create a thread in general banter, I'd be happy to discuss what you brought up further.

Yeah, I bit the bait.
3 Nov 2011 ~ 10:44pm primesuspect (or not, because we really discourage politics discussion on Icrontic, and by discourage, I mean nuke )
3 Nov 2011 ~ 11:06pm cola lol, k
3 Nov 2011 ~ 11:12pm ardichoke Must... Not... Feed... [strike]Moron[/strike] Troll...
3 Nov 2011 ~ 11:49pm somethingrandom Not that I have a dog in this fight but a discussion about layoffs should be fun. Several comments:

1) Layoffs aren't always detrimental to productivity. My company did one in 2009 (about 5-6% of staff) and you can be sure that I wisely chose the engineer that was let go from my team. *If* AMD hasn't done a layoff in the last 3-4 years (I've no idea and I don't care enough to check), this might not be that dire from a productivity standpoint. That said, if they habitually lay people off, you'll cut muscle instead of fat and that's disruptive as well as being counter-productive.
2) Since I'm not in the chip business, I probably shouldn't comment but I just compared Intel's margins with AMD's and AMD's margins are just plain anemic. While I understand that Intel positions itself as a premium product, the numbers appear out of whack to me.
3) I just looked at their quarterly earnings numbers. Someone wasn't watching spending in marketing, general and administrative. While R&D and cost of goods sold grew 3% over the last year, MG&A grew 9% over the last year. Meanwhile, revenue was essentially flat.

I don't follow AMD (we use Intel in our products these days) but wonder why their MG&A spend grew disproportionately. Did they try to launch too many products or something? In any case, if the marketing department's hit hard, it might not matter that much as it would be surprising if they were the ones actually selling the product to customers.
4 Nov 2011 ~ 12:08am somethingrandom Additional reading of their filings are interesting as well:

1) Their revenue mix is moving towards their lower-cost, lower-margin products.
2) Looking at their headcount numbers, they added almost 1000 employees (~11000 -> ~12000) in the last year while their top-line revenue was essentially flat. Christ, someone made a mess of things as a wise business model would have hiring trail revenue.
4 Nov 2011 ~ 12:13am somethingrandom Reading their SEC filings brought a couple more gems:

1) Their margins are dropping due to their low-end products accouting for a larger percentage of revenue. While I don't follow AMD, I wonder if this is because their server products perform poorly (this is why we use Intel).
2) Looking at their headcount numbers between the latest filing (~12000 employees) and twelve months ago (~11000 employees) make me scratch my head. They increased the number of employees by 9% while revenue was essentially stagnant. It would have been wiser to have hiring track/trail revenue.
4 Nov 2011 ~ 12:20am primesuspect somethingsmart
4 Nov 2011 ~ 12:36am Cliff_Forster The debate here, it's empty to me, I'll tell you why.

People are not "fat". Don't tell me I have a detachment from corporate reality, blah, blah, blah, just because you may have watched enough Fox news to actually start believing the bullshit you are fed. The news is owned by corporations, corporations that would like to convince you that you are worth far less than you actually are so you will continue to accept lousy work for declining pay and benefits. I'm not a communist nut job with a conspiracy theory, I'm just smart enough to connect all the dots. If you want to argue about it, I'm not interested, I'm right, the end.

Where was I...... Oh yes, People are not fat. I'd define corporate fat as a combination of poor process, bureaucratic management and outlandish executive compensation. In sixty days there is no way possible a new CEO could walk in, examine the entire process structure and make a truly informed decision that lead to destroying 1400 careers. He had no realistic way of knowing whats best. He had a headcount reduction target the day he walked in, right, wrong or indifferent, you post 10%, it looks round, satisfying, impressive in a news release. I guarantee you, day one, he walked in with that number, intent on executing against it.

RootWyrm is correct. It's like this, Rory Read read the first page of the investor appeasement manual. He played it as quickly as possible. A knee jerk reaction to deal with a declining stock price, in part due to bulldozer failing to generate buzz. Reduce head count, investors feel a little better, stock goes the right way for a day, and Rory Read is that much closer to cashing in his bonus options worth millions. If any right winger want's to go toe to toe on how he is entitled, and how much it costs to retain the services of a AAA executive, and how someone has to be the bad guy for the greater good, blah, blah, blah.... Once again, not really interested in the debate. I'm right, you are not, the end.

My point, People are not fat. Cutting people, it's just the easiest play in the book, one that can be executed quickly, make a splash and have some immediate impact on the stock price. For the long haul, it will prove detrimental.

I work for a company that had massive layoff's a couple years ago. Now that the market is back, we are struggling with service and quality issues for our customers, and the leadership wonders why? Let me tell you, I knew each person they let go, and not one of them was "fat." They are people, people matter, my loyalty lies with people. People make things, they build things, they generate ideas, they give tirelessly of themselves in hopes that they can provide for themselves and a family. I don't care how clever you think a corporate strategy may be, you can't gloss over the human impact.

I'm fairly certain I was the worlds last unflinching AMD fanboy. I loved that company, as foolish as I may have been, I felt like AMD had a soul that it's competitor lacked. I felt like they operated outside of the corporate norm. I fell in love with them with my first Slot A Athlon, and have been steadfast ever since. Rory Read has destroyed that in sixty days. AMD is a shell of it's former self, it's spirit broken, the thing that differentiated it, it's people have been compromised for a 5% gain in stock price. For me, AMD will never be the same.
4 Nov 2011 ~ 12:52am ardichoke You weren't the worlds last unflinching AMD fanboy. I was right there with you. Until today. Today they proved they're nothing more than another soulless corporation out to make a quick buck at anyone's expense.
4 Nov 2011 ~ 1:03am PirateNinja To dump the emotion and human element out of firings is silly.
To dump the logical and systemic processes involved in a capitalistic society is silly.

The only thing any of us will agree on here is that good times and bad times exist. They push and pull on each other and forever shape our lives.

None of us know the circumstances, evidence, and reasons corporate did this so lets stop acting like were are all of the sudden finance, hr, marketing, industry, insider, etc. specialists and we fully understand the situation.

It sucks, it's a sad sign of AMD's current struggles, and all we can do is hope they pull out of it and that all the people who lost their jobs will get better ones to replace them.
4 Nov 2011 ~ 1:32am RootWyrm

somethingrandom wrote:

Reading their SEC filings brought a couple more gems:

1) Their margins are dropping due to their low-end products accouting for a larger percentage of revenue. While I don't follow AMD, I wonder if this is because their server products perform poorly (this is why we use Intel).

That's the thing, their server parts currently, do not perform poorly. Magny-Cours is the shiznat if you've got something that scales well with cores or you're virtualizing heavily. Intel cannot compete in the 4-socket space on cost, availability or memory. (Xeon MPs are a real nightmare.) For certain workloads, they suck - not as much as Bulldozer - but for others they're unbeatable.
Sometime back someone in upper management decided that instead of focusing on what they were doing right and improving to compete, they would instead try to cut Intel off at the head on the low-power and low-end parts. And apparently said upper management decided they'd make up the huge drop in margins on volume. (While people choose iPads over Windows 7 Starter Netbooks.) The low-end push was a fatal mistake, one that is going to cost them for years to come, because they've now lost the people they need to get back into the top end race where the margins are double-digit percentage.

2) Looking at their headcount numbers between the latest filing (~12000 employees) and twelve months ago (~11000 employees) make me scratch my head. They increased the number of employees by 9% while revenue was essentially stagnant. It would have been wiser to have hiring track/trail revenue.

Actually, that's entirely expected to some extent. Prior to a major release like this, we do expect to see a headcount bump disconnected from revenues, depending on accounting procedures. As part of a new product launch and product ramping, you expect to bring on additional marketing, additional project management, and additional engineering depending where you're at in the process. Remember that AMD also makes Radeon and has Northern Islands nearing release soon, so you're going to see a mix of hiring for two product launches.
I don't know enough about AMD's internal org to say for sure, but I do agree that 1K coming onboard as permanent seems very high. I'd expect half that at most, with the remaining 500+ being contractors. Regardless, you run afoul of the adage that you have to spend money to make money. That means hiring engineers to create new products, marketing and sales to pitch them, and so on. Hiring rarely can track revenue closely these days; when revenue is down, it becomes more important to deliver something new or improved. When revenue is up there's hew and cry that you can do more with less. (Not always true, but as we agree, layoffs are not inherently bad. Blanket layoffs almost always are, especially pure seniority ones.)
4 Nov 2011 ~ 2:37am UPSLynx Rory Read has destroyed this company. It's over. He has managed to nuke everything good about AMD.

Frigging shame. What a waste.
4 Nov 2011 ~ 10:37am RyanD UPSLynx: Hey man, I'm really sorry if I gave the wrong impression to you and this board. I'm not saying I know anything about what really happened at AMD, and I feel terrible about people who lost their jobs. I really do. Like I said, someone really close to me got laid off from AMD yesterday morning.

Seriously, good luck to you and everyone else. Don't get too down. The unemployment rate for people with college degrees is only 4.2%, so hopefully it's not as bad as it seems out there for qualified people like yourselves.
4 Nov 2011 ~ 12:21pm Cliff_Forster

RyanD wrote:

UPSLynx: Hey man, I'm really sorry if I gave the wrong impression to you and this board. I'm not saying I know anything about what really happened at AMD, and I feel terrible about people who lost their jobs. I really do. Like I said, someone really close to me got laid off from AMD yesterday morning.

Seriously, good luck to you and everyone else. Don't get too down. The unemployment rate for people with college degrees is only 4.2%, so hopefully it's not as bad as it seems out there for qualified people like yourselves.

That was classy man. Thanks.
4 Nov 2011 ~ 7:37pm QCH

RyanD wrote:

Seriously, good luck to you and everyone else. Don't get too down. The unemployment rate for people with college degrees is only 4.2%, so hopefully it's not as bad as it seems out there for qualified people like yourselves.

Seriously? Seriously? You've posted 60 times on this article, just join already.

Oh, and good post. +1
5 Nov 2011 ~ 8:35am johnB From what I've read, most guys were from the PR department. How good they were to begin with?

One can argue they were crippled because of internal politics, but fact is: AMD PR/Marketing sucks. Always have. Even when they had good performance products, it wasn't "out there". It was all about the GeForces and Pentiums.

They need new blood, someone who can get the word out about AMD. I just hope they don't FOCUS on low-end. As someone said here, you focus on high-end and let the low-end spawn from that, not the other way around. Raw performance isn't what brings in money, but surely it's what makes people want some brand instead of other, even if you aren't getting the most expensive offer.
5 Nov 2011 ~ 9:23am Shorty johnB,

Have you ever actually worked in PR & marketing in the technology field?

Seriously and politely, your post is so wildly off the reserve and fact free, it's actually scary.

Before you ask if I am, I am not. But have worked in technology an appropriately long time.
5 Nov 2011 ~ 9:58am Annes

johnB wrote:

They need new blood, someone who can get the word out about AMD. I just hope they don't FOCUS on low-end.

I'm fairly certain the people you're saying they need are the precise ones who got laid off. Ironic.
5 Nov 2011 ~ 10:00am Thrax

johnB wrote:

From what I've read, most guys were from the PR department. How good they were to begin with?

One can argue they were crippled because of internal politics, but fact is: AMD PR/Marketing sucks. Always have. Even when they had good performance products, it wasn't "out there". It was all about the GeForces and Pentiums.

They need new blood, someone who can get the word out about AMD. I just hope they don't FOCUS on low-end. As someone said here, you focus on high-end and let the low-end spawn from that, not the other way around. Raw performance isn't what brings in money, but surely it's what makes people want some brand instead of other, even if you aren't getting the most expensive offer.

You clearly don't understand the internal situation at AMD. I'm sorry.
5 Nov 2011 ~ 2:45pm Komete AMD's PR has always sucked. I got turned onto AMD from reviews and post on this very site way back in the day. Not from any AMD marketing. I'd have to agree with JohnB on that part.

All that aside what the layoffs tell me is there is nothing exciting coming down the pipe over the next year at least. I'm so disappointed with AMD. Bulldozers performance is terrible enough but did they have to tarnish the FX name with it? They should have called it the Phenom 8 series. Since all it's possibly meant for is windows 8. Word is still out on that.
5 Nov 2011 ~ 2:55pm UPSLynx Yeah, AMD needs new blood in the marketing department because they just bled out a significant portion of their new blood with the layoff. Weird.
5 Nov 2011 ~ 3:02pm primesuspect

Komete wrote:

AMD's PR has always sucked. I got turned onto AMD from reviews and post on this very site way back in the day. Not from any AMD marketing. I'd have to agree with JohnB on that part.

To be fair, though... How do you think sites like ours got the documentation and hardware needed to give you that info? AMD PR.

One of PR's jobs is to identify and work with the very sites that you get all your information from. They do their jobs well.
5 Nov 2011 ~ 3:46pm Komete Prime, when I say back then, I'm talking PII/III athlon days. I don't think Icrontic did reviews back then. Back when OPPAINTER was laying down overclocks. Maybe a little before then. It was pretty much just the geek community on its own. I've strictly bought AMD ever since.

Now AMD did do better with fusion. That is the best effort marketing program from them I've seen.

Maybe AMD doesn't need great marketing because they know their core customers are on a budget. And their best just happens to be budget grade CPU's and chipsets. It's why I went AMD on my last upgrade. But in another year, if I can swing it, I'm going blue.
5 Nov 2011 ~ 6:05pm PirateNinja Not to be a picky prissy patty but Icrontic did do reviews and interviews with important people from the enthusiast market as far back as 10 years ago.
6 Nov 2011 ~ 4:57am Tim I'd like to see a news story where some laid off employees took their families and moved into the CEO's mansion and made the CEO pay them money they would have earned if they were not laid off. True, it probably would not last long before the cops came in, but it'd be nice to shake up these CEOs a bit. Just to remind them that they aren't untouchable.

I hate reading their prepared speeches with all the buzzwords. It's a bunch of pure BS, and I see right through it. They don't fool me at all.
6 Nov 2011 ~ 5:00am Tim My last AMD CPU was my Athlon XP 2500+ in my old NF7 PC. I take time to read the performance tests, and I'll spend the extra money for Intel products if I think it is worth it.
7 Nov 2011 ~ 12:10pm GHoosdum I'm a shareholder. I've been a shareholder since 2006 when I bought at over $30 per share, stupidly believing that the momentum that AMD had gained in the CPU arena would carry forward.

As a shareholder, I am NOT comforted by this move by the company. It is the sheerest folly to lay off employees from your profitable arm - effectively killing morale in the one place you're making money.

What would make me happy as a shareholder is if AMD's management put their big boy pants on, and decided to do what it takes to become competitive with Intel again.
8 Nov 2011 ~ 5:16pm Mike Near the top of this article is a partial list of some upper echelon folks that recently got the axe. It is all too obvious that these folks are being removed so that Rory can move in "His" people to occupy these posts, and cover his ass. In addition to marching into AMD HQ and getting a pat on the back for executing a 10% redux in workforce, he can also begin immediately to rebuild his own inner circle, one that will better serve and protect him.

Out of respect for those that were effected, I will only list the positions which they held, and then unceramoniously eliminated:

UPDATE 2:48PM EST:

- Director of the Products Group
- Senior engineer
- PR Manager
- PR Rep
- FirePro Product Marketing Managers(2)
- Corporate VP of Strategy and Fellow
- VP of Marketing
- Corporate Marketing Fellow.

Rory Read has begun his empire building. Phhhht
8 Nov 2011 ~ 7:02pm Mike For the record, I have always loved AMD processors, and built my first desktop computer back in the mid '90's using an AMD K6 500Mhz processor. Built many others since, Sempron, Athlon, and my most recent build uses a Phenom II X6 100T. I suspect that my next build will consider an Intel processor, depending on price-point/performance comparisons, and not blind loyalty to AMD products. Seems Intel also has that wonderful policy of 10% layoffs each year. I have lost a lot of respect for AMD over this recent action.
8 Nov 2011 ~ 7:03pm UPSLynx Three FirePro product marketing managers, actually.
25 Dec 2012 ~ 10:26pm cola Neville here
25 Dec 2012 ~ 11:27pm Bandrik Reflecting on this, I think it was a blessing in disguise for THQLynx.
25 Dec 2012 ~ 11:41pm RyanMM
Neville here
Did something new happen to warrant the bump?
26 Dec 2012 ~ 12:15am cola aww, the spampost got deleted QQ
26 Dec 2012 ~ 3:00am Canti
Neville here
Red leader standing by.
26 Dec 2012 ~ 11:40am csimon Don't bump this thread the day after I order my FX-8350.