AMD’s CEO Addresses Employees Following Massive Layoffs

Rory Read: Layoffs Are Difficult Step, But the Future Is Bright

by Anton Shilov
11/07/2011 | 03:49 PM

Rory Read, chief executive officer of Advanced Micro Devices who took office a little more than sixty days ago, addressed the company’s employees following massive layoffs that affected between 1400 and 1500 workers. The executive of the company will unveil the chip designer’s new strategy this Wednesday and completely believes that AMD will be able to deliver on its commitments even with dramatically reduced workforce.

 

“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. […] 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,” the letter by Rory Read (which has been published by a company’s [perhaps, former] employee on conditions of anonimity) claims.

Based on unofficial information, AMD intends to unveil a new strategy under which the company’s low-power micro-architecture code-named Bobcat will play a much more critical role in the company’s future than it was originally intended to.

Although the company fired massive amounts of people worldwide across different divisions, the massive hits were taken by public relations and marketing departments, which will be extremely reduced in terms of headcount. Although this will reduce costs, it is clear that this will also greatly reduce AMD’s ability to advertize itself in various way, which will automatically translate into better recognition of Intel, Nvidia and other historical competitors of AMD among end-users.

“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,” Mr. Read announced.

It remains to be seen how competitive will AMD be as a result of the most recent staff cut. The Sunnyvale, California-based company already had to cut some corners when designing its Bulldozer micro-architecture and the latter failed to become the world’s highest performing microprocessor.

“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 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, stressed Mr. Read.