AMD confirms job losses amid revenue slump

October 19, 2012 | 11:09

Tags: #apu #financial #job-losses #kabini #layoffs #mobile-market #rory-read #semiconductor

Companies: #amd #intel

AMD has confirmed rumours of lay-offs as it looks to trim operating expenses by letting around 15 per cent of its staff go amid spiralling losses.

Signs that the company was struggling more than usual appeared when it warned of a 10 per cent drop in quarter-on-quarter revenue and a 13 point slip in margins - figures which equate to a loss of $157 million for the quarter. That massive loss comes despite a drop in operating expenses of seven per cent, leading to rumours that AMD would lay off around 20 to 30 per cent of its staff to cut operating costs still further.

AMD's announcement has confirmed that the rumours are true, although more expansive in scope than the company has planned: while AMD staff are going to be laid off as a result of the company's financial troubles, the total will amount to around 10 per cent - significantly lower than the rumoured 20 to 30 per cent cuts - which mean around 1,700 jobs are going to go.

AMD's chief executive Rory Read has laid out a plan to get AMD back in the black, however - and it involves shifting considerable assets away from the PC market. Rather than concentrating its efforts on developing, as the Red Team's fans have hoped, high-end chips to compete with Intel, the company is going to divert around half of its resources to embedded computing projects - in other words, tablets and other low-power areas. With AMD's Kabini accelerated processing unit (APU) system-on-chip design just around the corner, it's clear that AMD is hoping to beat Intel in the lucrative mobile market.

For now, however, AMD is admitting that times will continue to be hard: projected revenue for the next quarter is expected to decline by around 9 per cent. By Q3 2013 the company aims to be breaking even, if not making a profit - but that's a fair while for investors to wait while the company continues to haemorrhage cash.

AMD has yet to confirm the areas affected by the lay-offs, with rumours pointing to losses in the engineering and sales divisions - two parts of the company which will be critical to AMD's continued existence.
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