AMD Readies Another Round of Reorganization, Lay-Offs

AMD to Take Further Restructuring Actions in the First Half of 2013

by Anton Shilov
11/19/2012 | 10:50 PM

Advanced Micro Devices is set to continue its restructuring efforts in the coming year, which will include further layoffs. Even though they are not projected to be significant, their incoming lowers the state of employee morale and encourages many old workers to leave AMD for other companies.

 

“All the old AMD street-fighters are gone, and a lot of them feel that Rory has made a big mistake in getting rid of them. Without them, people feel like they’re in a losing battle,” a source with knowledge of AMD’s situation told AllThingsD web-site.

AMD plans to lay off 15% of its workforce, or around 1700, this quarter to reduce operating costs so to reach $1.3 billion break-even point in 2013. Apparently, AMD will not stop here and will continue to reduce its headcount to reduce its costs. Unfortunately, AMD still does not know how many people will need to be shown the door. What should be noted is that AMD managers are waiting to see how many more people quit on their own accord between now and January – and thus do not require expensive severance packages.

 

“As we communicated during our third quarter earnings results, we expect to take further restructuring actions in the first half of 2013. At that time, we did not know what specifically they would consist of or if they would be material. We have not provided any updates since then and do not comment on rumor or speculation,” a statement by AMD reads.

Even though AMD will clearly lower its operating costs by reducing the headcount of its employees, without talented engineers, developers or sales people, the company will be unable to design competitive products or efficiently sell them. At the end, the firm will be even less competitive against Intel, Nvidia or other than it is today.