Troubled processor manufacturer AMD announced late Thursday that it was engaging in a massive restructuring plan, validating rumors published hours before on TechEye.
“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 a 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.”
An email from CEO Read to AMD’s employees, obtained by Bright Side of the News and Icrontic, stated that, “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.”
This announcement occurs weeks after AMD released its FX processor line, which was met with less than stellar enthusiasm from consumers and the press.
Technology analyst Jeff Kagan believes that, “the AMD of the future will look nothing like the AMD of today.”
“AMD is a distant number two to Intel,” Mr. Kagan told Hardware Canucks. “Intel has around 80% market share for PC processors. Depending how you look at the situation, that either represents a huge opportunity for AMD, or a wall too high to climb.”
AMD’s press release announcing the restructuring stated that the company, “expects that the restructuring plan will result in operational savings, primarily in operating expenses, of approximately $10 million in the fourth quarter of 2011 and $118 million in 2012.”
The layoffs at AMD affect both employees and executives. A list compiled by Icrontic confirms the following executives have been laid off: Director of the Products Group 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.
Technology mega-pundit Charlie Demerjian, editor-in-chief of Semi Accurate, thinks that the layoffs will have a negative impact on AMD.
“Carrell Killebrew, the man credited with Eyefinity, [is] probably the largest advantage AMD has in the graphics marketright now. [This] is completely unfair, there are lots of good people remaining at AMD, but the sheer number of VPs, Fellows, and other high ranking people that were just ‘optimized’ is rather shocking,” wrote Mr. Demerjian.
AMD’s layoffs and restructuring are just another chapter in a saga of troubles for the chip manufacturer. The launch of the FX processor line earlier this year, which was supposed to be the company’s saving grace, was met with muted enthusiasm; Q3 revenue earning projections were not met; manufacturing partner Global Foundries caused supply issues in September; former CEO Dirk Meyer was forced out by the board of directors in January.
While 2011 has been a turbulent year for the company, many remain optimistic about AMD’s future; the email sent by CEO Read to employees ended with hints of this sentiment.
“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,” CEO Read wrote. “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.”