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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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xIcarus
Senior Member



Posts: 954
Joined: 2010-08-24

#4940841 Posted on: 10/19/2014 03:35 PM
yes the 290 cards were and still are famous for their power efficiency and excellent thermal behavior


I can't tell if you're being sarcastic, but the 780ti reference is 40w less power hungry than that 290x reference. Check wikipedia.

Just what kind of pricing seems actually quite good to you? The $300 for an 160 square mm i7 with 4-cores that is barely any different from the Nehalem so many years back?


I don't know what drugs you're on, but the 2600k is 50% faster than the 880 which it succeded. By extension, the 4770k is 80% faster than the 880 and 20% faster than the 2600k.
And if you want another example of the sheer performance increase (the top of the line cpus), take the 5960x vs nehalem's 975. You will find that the 5960x is 150% (!) faster than the 975. All the data is here:
https://www.cpubenchmark.net/high-end-cpus.html
You have no clue what you're talking about.

Fox2232
Senior Member



Posts: 11809
Joined: 2012-07-20

#4941126 Posted on: 10/20/2014 07:16 AM

I don't know what drugs you're on, but the 2600k is 50% faster than the 880 which it succeded. By extension, the 4770k is 80% faster than the 880 and 20% faster than the 2600k.
And if you want another example of the sheer performance increase (the top of the line cpus), take the 5960x vs nehalem's 975. You will find that the 5960x is 150% (!) faster than the 975. All the data is here:
https://www.cpubenchmark.net/high-end-cpus.html
You have no clue what you're talking about.

I stepped out of this discussion because while I took general approach, you felt need to take it to personal level and defended your personal choices.

You do not need to defend intel. And definitely there is no need to attack guys that way around.
I had "lovely" 1st gen i7, and it was not more than old crappy P4 with bit higher clocks and 4 physical + 4 virtual cores. It gave real benefit only to those old games and applications written for P4 and few new benchmarks.

Intel improved ipc a bit with 2nd generation and boosted clocks, but HT side is still in shadow till today as there are very few applications/games which use it properly.
I got i7 because of benchmarks like you posted, was total waste and that is why I am happy with real 4 cores and no HT at 50% higher clocks than is most of stock CPUs.

At time intel gives us 6core i5, I may consider to move forward.

And you may want to realize that here on guru3d way too many people do something extra but once you step out, you'll see millions of people who don't.

reix2x
Senior Member



Posts: 518
Joined: 2010-01-20

#4941379 Posted on: 10/20/2014 04:35 PM
Good Luck AMD! i'm sorry for those people that will be fired.. i wouldn't like to lose my job.

Rexob
Member



Posts: 73
Joined: 2014-05-07

#4941392 Posted on: 10/20/2014 04:53 PM
This does not bode well for AMD - cutting jobs only hurts their ability to compete. I understand the business end of it, but it's a catch 22 unless the vast majority of 710 employees released were all janitorial / custodial; highly unlikely they employee that MANY.

CPC_RedDawn
Senior Member



Posts: 9313
Joined: 2008-01-06

#4941397 Posted on: 10/20/2014 05:08 PM
Tell you what they need to do first is improve their memory controllers and start to roll their APU's to DDR4! That's what's holding those back right now!


Oh god yes!

However, slight flaw in your plan. DDR4 right now is expensive as hell, and for the faster models it will cost you a kidney or limb to afford those kind of chips. APU's rely on high frequency memory for better graphics performance. Just making it DDR4 now would be stupid as the APU's are aimed at budget users who can't afford DDR4.

They need to focus on a single high end multicore CPU, go all out balls to the wall. New architecture, new memory controllers, better usage of caches, etc, etc.

Then use that technology and filter it down to their lower end chips and release a new APU range using the same architecture of that single high end chip.

It would be more cost effective to create one CPU architecture then filter it down to their APU's not create a brand new one that uses different chipsets and sockets. That is just stupid adding more product SKU's to their production line.

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