The beginning of the end for AMD?

[mjw21a]

Sorry for posting this here, but I wanted to avoid the general area..... Too many Intel fanboys would jump on board otherwise...... Copied and pasted the The Inquirer.....

AMD is preparing to lay off thousands
Bleak times
By Lawrence Latif
Mon Oct 15 2012, 12:21
AMD logo

CHIP DESIGNER AMD is preparing a big round of layoffs according to multiple sources as it tries to get back into the black.

Last week AMD revised its revenue forecasts down considerably due to weak demand and now multiple sources have said that the firm is preparing to lay off a significant percentage of its workforce. According to three sources that spoke to Allthingsd, AMD is preparing to cut anywhere between 10 percent and 30 percent of its 11,000 employees.

AMD's financial situation is not looking particularly good with the firm already announcing more than $500m of losses this year, and its third quarter is not looking much better. CEO Rory Read has already slashed costs by laying off people, mostly in the firm's marketing department, but according to latest reports this time the cuts will focus on core engineering and sales.

The INQUIRER heard from a source last month that AMD was preparing for mass layoffs and that it had been drawing up redundancy lists for some time, with employee morale being very low. When this was put in front of a VP at AMD, a 'no comment' rather than denial was offered.

AMD's share price has been tanking and on Friday the firm's stock closed down over 14 percent, with its market capitalisation dropping below $2bn. At that price, the book value of AMD's assets is considerably higher than its market value, meaning it might be a tempting proposition for a corporate raider to buy the company and break it up for a profit.

While there is little doubt about Read's decision to reduce the size of AMD's talent pool, the size of the pending workforce cut is an open question and might see the firm being forced to scale back its product ambitions. Given that AMD is competitive in graphics and not CPUs at the moment, it seems likely that engineers on the ex-ATI side of the firm are sitting a bit more comfortably than the CPU designers. µ

The Inquirer (http://s.tt/1q4WS)

 

[Soulcatcher668]

This is really crappy news. Less competition is not what we need.

To me it seems like AMD's latest round of CPU's are a great step forward.

Hopefully this will be a good move for AMD and let them rebuild without crushing overhead.

 

[rescuetoaster]

OR it is a FANTASTIC time to buy stock in AMD.

 

[wingman99]

If AMD dies life will go on. They have not done anything meaningful anyway for a long time.

I buy who ever makes the best product and intel is the best.

 

[Woomack]

Intel is best but could be better. There is no competition and they are not even trying. Without AMD it will be even more boring than it's now and at least for me AMD is more fun for oc.

 

[rescuetoaster]

If AMD dies life will go on. They have not done anything meaningful anyway for a long time.

I buy who ever makes the best product and intel is the best.

They had a poor product on their last release, otherwise they were doing just fine.

You can also expect intel to stagnate and raise prices if they are the only ones left.

 

[Soulcatcher668]

If AMD dies life will go on. They have not done anything meaningful anyway for a long time.

I buy who ever makes the best product and intel is the best.

/facepalm

Yeh..... monopolies always benefit the consumer /end sarcasm

The new round of processors look really good for low cost mid-range systems. Not having to put a dedicated GPU in and still having decent performance seems like a win to me.

 

[Mandrake4565]

Makes me sad also,I always try to root for the little guy. As in the previous posts, it definitely isn't good for the enthusiast pc user. Who is going to push for better products if nvidia or intel have no competition.

 

[Solder]

The 3 year look at their stock is quite the bumpy ride. Last October AMD sold at 4.53 at its lowest and the end of August, the year prior, sold for 5.61 at the year's low. 2009 had
a low of 4.6 on Nov 2; so there seems to be a trend around this time of the year for AMD. I wonder why sales tend to slip off in the latter quarter of the year?
They look to be on a downward slope, just not sure what the issue is. Although, just speculation, Intel could be gaining popularity even with their higher price tag.

EDIT: Intel has been on a decline since the beginning of May this year also. Although, their shares have been on a steady up-tick over the past 3 years with 2012 being their
largest gains and stock hitting its peak on May 2 at 29.18. Intel closed today at 21.73/share so they're taking a hit this year too. Must be the effect of a cruddy economy.

 

[mjw21a]

Having a monopolly is no good for anyone. Right now however we effectively have a monopolly anyway, though at least AMD can keep pricing down at the mid range and low end. If there's no more AMD you can expect those low and and mid range chips to cost roughly where the high end chips presently are......

With these layoffs, there is an absolutely certain, 100% guarantee that AMD can never hope to develop a product to compete with Intel. Steamroller may never actually eventuate now.....

 

[Solder]

I would really hate to see what would happen if we lost AMD. I, like most people, strongly believe corporations need competition, for obvious reasons.
The tech world would suck without AMD. Come on, pull it together and get out of the funk AMD! The world needs you!

 

[Aldakoopa]

It would be funny if they had a mega-chip behind their backs that they're just waiting for the time when it seems impossible for them to get back up to release and give Intel the ultimate sucker-punch.

In reality though, would AMD really fall completely out of the picture? It still wouldn't be a good thing, they're still strong in the GPU department, and I'm sure they'd continue making awesome APUs, but anything performance at all may be lost forever. That's just the way I see it unfolding, anyhow.

 

[mjw21a]

Without being able to compete in the high end, they can't demand the margins they need to survive.....

 

[TeknoBug]

Count on it, if AMD is gone, Intel CPUs will go up in price, you won't see $120-200 CPUs anymore or even prebuilt Intel PCs at prices you see now.

 

[RGone]

Without being able to compete in the high end, they can't demand the margins they need to survive.....

Well that then is the company problem. As far back as 2007 AMD said they were not going to push for the high end of desktop cpus. They have said it by one or the other of their higher-ups that they did not intend to compete at the very high end of the desktop market; even in this year. So what does one really expect? We just don't want to accept what AMD execs have made perfectly clear.

 

[Knufire]

Without being able to compete in the high end, they can't demand the margins they need to survive.....

Remember that there isn't much money in the high end...you have bigger margins but the volume of sales is MUCH lower. Desktops are slowly fading out, the money is all in low powered chips (Ultrabooks, mobile devices) right now.

AMD also (AFAIK) makes a lot of the console graphics chips, which is probably a pretty penny in their pocket.

 

[officedemon]

Remember that there isn't much money in the high end...you have bigger margins but the volume of sales is MUCH lower. Desktops are slowly fading out, the money is all in low powered chips (Ultrabooks, mobile devices) right now.

AMD also (AFAIK) makes a lot of the console graphics chips, which is probably a pretty penny in their pocket.

HP had my money until i learned how to build my own.

Desktops aren't upgrade as much as Laptops

 

[clubber_lang]

If AMD goes down....it's bad news for all of us.....even the Intel users. Intel could sky rocket prices on the CPU market and it would screw all of us. We "Need" AMD weather anyone believes this or not. A monopoly can be the worst thing ever as far as the majority of the people on this board....or any enthusiast board goes.

 

[Seebs]

Companies do mass lay-offs all the time and continue to plug along... This is just re-structuring and elimination of "redundancies" in the work force. Happens in every company that has more than two employees...

You guys can be assured that AMD is not going to close shop any time soon.

And just to be on the "objective" side of things... Let's just remember that Intel is also planning some large layoffs this year... More specifically from their McAfee division (yup; Intel owns McAfee).

It happens in every company; it will happen in every company - even successful companies do layoffs every once in a while... All it takes is for a new CEO to come in and decide to "clean house". Plenty of CEOs have done it while the takings were good and plenty more will do it when the takings are "not so good". It's the nature of the business; anything to make the bottom line a bit better.

If anything; I'm with rescuetoaster that this is just a good "buy" time for the stock.

 

[Frakk]

AMD have a lot in the pipeline.

If you take out Piledriver,-

New servers, New CPU's, New APU's, New GPU's, Nintendo already bagged, Hardware for Microsoft's xbox 720 and Sony's PS4 are a strong possibility. and Tablet chip's also done and ready.

That's a lot, and all of it coming in 2013, if they can survive until then, they will be just fine.

@ wingman99, AMD are making cuts because of a 10% revenue fall, Intel have fallen 14% http://online.wsj.com/article/SB10000872396390443854204578060943152675174.html?ru=MKTW&mod=MKTW