The Cuts Start . . .

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Looks like the fiscal numbers are going to be pretty bad for AMD this quarter.

Why do I say that? According to the Inquirer, benefits are going to be cut.

For instance, AMD’s stock purchase plan is going to be terminated November 1, or rather shortly after AMD’s next quarterly results. This is pretty odd given that AMD had a special shareholders meeting to authorize expanding the program just nine weeks ago.

It seems more than a little funny to suddenly decide shortly after you’ve expanded the program that now it’s now a bad idea to encourage your employees from buying stock in your company. The program consisted of selling newly issued stock, so it’s not like AMD will save money by doing this. Why was it good in July and bad in September?

There’s also more conventional cost-saving measures being discussed like pay-free “vacations” and reduced bonuses.

Might I be blasphemous and suggest that given the financial results of the company this year, no one at AMD deserves any bonus, especially at the top?

Oh, I don’t doubt some AMD employees have done some work lately that deserve a bonus, like those who figured out how to make K10s run at 3GHz, but wouldn’t it be better to reward such people (or anyone else) until after AMD gets back into the black?

How about “No profit-sharing until we have profits?” I know, that’s a foreign notion in certain circles, but don’t worry, you’ll get used to it.

And if there’s going to be some furloughs among the rank-and-file, how about some among the execs? OK, I’m sure the execs will say they’re essential, and they might even be right, but working a week or two at minimum wage, no bonuses, no incentives, no nothing would work just as well.

When the carrot doesn’t work, well, if you’re going to take the stick to the back of the beast, why not the front, too?

It certainly will make any beating given to the regular employees hurt much less. If there’s anything that kills morale in a company, it’s leaders who cut everybody but themselves, especially when many think they’re the ones who got them into the mess.

And if Hector thinks it’s all Intel’s fault, let Hector sue Intel for his lost bonuses and options. 🙂

The operating results that AMD will report next month are going to be bad, probably just as bad as the last two quarters. The overall results will probably improve due to asset sales, but this quarter includes a general price cut, and neglible Barcelona sales.

None of this should come as a surprise to those following AMD at all, but up to now, AMD has done practically nothing besides reducing capital expenditures to cut its costs, and Wall St. will be screaming for something that looks like cost-cutting after next month’s loss.

So maybe in the upcoming weeks, certainly right after the financial results are announced, AMD will toss some meat to the howling dogs, and these will be some of the tidbits.

Let’s see how much prime filet will get carved out of the execs.



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