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Guru3D.com » News » AMD cuts 710 jobs after disappointing results

AMD cuts 710 jobs after disappointing results

by Hilbert Hagedoorn on: 10/17/2014 09:24 AM | source: | 74 comment(s)
AMD cuts 710 jobs after disappointing results

It was in the line of expectation. The new ceo Lisa Su will apply these job cuts AMD will cut 7% of its staff, 710 jobs after a disappointing period. The profits from APUs and Graphics card dropped with 16 percent.

The job cuts will likely get in effect this year already, which will save 9 Million USD, and 85 Million over the entire next year. The entire reorganization will cost 57 million and another 134 million the year following. The division that produces semi-custom chips for PS4 and XBox One did perform well. Together with the Enterprise and Embedded branch profit there was 108 Million USD.

SUNNYVALE, CA -- (Marketwired) -- 10/16/14 -- AMD (NYSE: AMD)

  • Q3 2014 Results
    • Revenue of $1.43 billion, flat sequentially and a decrease of 2 percent year-over-year
    • Gross margin of 35 percent
    • Operating income of $63 million and non-GAAP(1) operating income of $66 million
    • Net income of $17 million, earnings per share of $0.02 and non-GAAP(1) net income of$20 million, non-GAAP earnings per share of $0.03
  • Announces restructuring plan to better position the company for profitability and long-term growth 

AMD (NYSE: AMD) today announced revenue for the third quarter of 2014 of $1.43 billion, operating income of $63 million and net income of $17 million, or $0.02 per share. Non-GAAP (1)operating income was $66 million and non-GAAP (1) net income was $20 million, or $0.03 per share.

"AMD's third quarter financial performance reflects progess in diversifying our business," said Dr.Lisa Su, AMD president and CEO. "Our Enterprise, Embedded and Semi-Custom segment results were strong; however, performance in our Computing and Graphics segment was mixed based on challenging market conditions that require us to take further steps to evolve and strengthen the financial performance of this business. Our top priority is to deliver leadership technologies and products as we continue to transform AMD."

 
GAAP Financial Results
           
  Q3-14   Q2-14   Q3-13
  Revenue $1.43B   $1.44B   $1.46B
  Operating income $63M   $63M   $95M
  Net income (loss) / Earnings (loss) per share $17M/$0.02   $(36)M/$(0.05)   $48M/$0.06
             
 
Non-GAAP Financial Results1
 
           
  Q3-14   Q2-14   Q3-13
  Revenue $1.43B   $1.44B   $1.46B
  Operating income $66M   $67M   $78M
  Net income / Earnings per share $20M/$0.03   $17M/$0.02   $31M/$0.04
             

Effective July 1, 2014, AMD reorganized into two business groups, one focused on the traditional PC market and the second focused on adjacent high-growth opportunities.

Accordingly, AMD has two reportable segments:

  • Computing and Graphics, which primarily includes desktop and notebook processors and chipsets, discrete GPUs and professional graphics; and
  • Enterprise, Embedded and Semi-Custom, which primarily includes server and embedded processors, dense servers, semi-custom SoC products, engineering services and royalties. 

Quarterly Financial Summary

  • Gross margin was 35 percent in Q3 2014.
    • Gross margin was flat sequentially and included a $27 million, or 2 percent benefit, from revenue related to technology licensing.
  • Cash, cash equivalents and marketable securities were $938 million at the end of the quarter, essentially flat from the prior quarter.
  • Total debt at the end of the quarter was $2.20 billion.
  • Computing and Graphics segment revenue decreased 6 percent sequentially and decreased 16 percent year-over-year. The sequential decrease was primarily driven by lower chipset and GPU sales. The year-over-year decline was primarily due to decreased notebook processor and chipset sales.
    • Operating loss was $17 million, compared with an operating loss of $6 million in Q2 2014 and operating income of $9 million in Q3 2013. The sequential decrease was primarily driven by lower revenue while the year-over-year decrease was primarily driven by lower revenue partially offset by lower operating expenses.
    • Client average selling price (ASP) increased sequentially and year-over-year primarily driven by a richer mix of notebook processor sales.
    • GPU ASP decreased sequentially due to lower desktop GPU ASP and increased year-over-year.
  • Enterprise, Embedded and Semi-Custom segment revenue increased 6 percent sequentially and 21 percent year-over-year primarily driven by increased sales of semi-custom SoCs.
    • Operating income was $108 million compared with $97 million in Q2 2014 and $92 millionin Q3 2013. The sequential and year-over-year increase was primarily due to increased sales of semi-custom SoCs.
    • Embedded revenue grew by double digits on a percentage basis sequentially.

Q4 2014 Restructuring and Transformation Initiatives
As a part of AMD's ongoing transformation work, the company has developed a targeted restructuring plan to better position AMD for profitability and long-term growth while aligning investments and resources with high-priority opportunities.

The restructuring plan, which will be largely implemented in Q4 2014, is expected to:

  • Reduce global headcount by 7 percent, largely expected to be completed by the end of Q4 2014;
  • Align AMD's real estate footprint with its reduced headcount;
  • Result in a restructuring and impairment charge of approximately $57 million in Q4 2014, primarily related to severance, and a restructuring charge of approximately $13 million in 1H 2015, primarily related to real estate actions;
    • The company expects to make cash payments related to these actions of approximately$34 million in Q4 2014 and $20 million in 1H 2015;
  • Result in operational savings, primarily in operating expenses, of approximately $9 million in Q4 2014 and approximately $85 million in 2015.

"While decisions that impact the size of our global team are never entered into lightly, this is the right step to ensure we prioritize our resources and engineering investments in our highest-priority opportunities that can drive improved profitability and long-term growth," said Dr. Su.



AMD cuts 710 jobs after disappointing results




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TeX_UK
Senior Member



Posts: 1953
Joined: 2003-08-21

#4940132 Posted on: 10/18/2014 06:44 AM
I really cant see AMD lasting much longer hearing this, getting rid of almost 10% of the workforce, 65% drop in profit in the last quarter not including a further 13% drop in September, share price plummeting by 43% in the last 3 months no company can keep taking hits like that.

Doom112
Senior Member



Posts: 202
Joined: 2014-09-19

#4940139 Posted on: 10/18/2014 07:03 AM
I really cant see AMD lasting much longer hearing this, getting rid of almost 10% of the workforce, 65% drop in profit in the last quarter not including a further 13% drop in September, share plummeting by 43% in the last 3 months no company can keep taking hits like that.


Here some people cannot believe or want to believe facts.

Some people are in AMD dream world like AMD Roy which need to come reality and Admit failure and than move on.

Fox2232
Senior Member



Posts: 11809
Joined: 2012-07-20

#4940147 Posted on: 10/18/2014 07:48 AM
Here some people cannot believe or want to believe facts.

Some people are in AMD dream world like AMD Roy which need to come reality and Admit failure and than move on.

Despite announcement about 7% of people off the door plan AMD trading value came up by 7.5% in comparison to what it was 2 days ago.

I think market knows better than you what economy in corporate business means.

And please do not get too far, it already looks like trolling. If we were in same room, I would call it data misinterpretation. And ask you if you did it on purpose or if you are just not good enough to read them properly.

southamptonfc
Senior Member



Posts: 2190
Joined: 2006-04-10

#4940155 Posted on: 10/18/2014 08:35 AM
Do not need to know exact dollar amounts. The graph shows that the amount AMD spends on R&D is less.


wow and lol, how can I argue against this insanity?

Look at the graphs provided by Denial. Until this year AMD has spent more than Nvidia on R&D!

Chillin
Senior Member



Posts: 6814
Joined: 2006-01-18

#4940157 Posted on: 10/18/2014 08:54 AM
Despite announcement about 7% of people off the door plan AMD trading value came up by 7.5% in comparison to what it was 2 days ago.

I think market knows better than you what economy in corporate business means.

And please do not get too far, it already looks like trolling. If we were in same room, I would call it data misinterpretation. And ask you if you did it on purpose or if you are just not good enough to read them properly.

Correlation does not imply causation. That's not the way the market works.

In any case, I could definitely see Samsung buying out AMD to secure the patents alone.

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