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AMD cuts headcount by 5%, reorganizes certain operations

Advanced Micro Devices late on Thursday said that it would cut-down its workforce by another five per cent in a bid to reduce its costs. The company said that it would considerably restructure its internal IT operations; consolidate real-estate facilities; re-organize its enterprise, embedded & semi-custom (EESC) business unit and appoint two local presidents to better oversee operations in crucial regions.

“The plan is focused on the company's ongoing efforts to simplify its business and align resources around its priorities of building great products and deepening customer relationships,” a statement by AMD reads.

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As a result of global headcount reduction by 5 per cent and reorganizations, AMD hopes to realize savings of approximately $9 million in 2015 and $58 million in 2016, which will help the company to better align with its near-term revenue profile. The company will recognize approximately $41 million in restructuring and impairment charges in its results for the third quarter of 2015. As of mid-2015, AMD had approximately 9469 employees. The five per cent cut will reduce the headcount to around 9000 people.

Going forward, AMD will outsource certain internally focused IT services and application development. At present the company designs various parts of its IT infrastructure (e.g., modules for SAP, applications for Sharepoint, etc.) as well as maintains its servers itself, but in the future it will outsource such operations to other companies.

“The outsourcing is not related to software teams working on drivers, ISV [independent software vendor] enablement or engineering/product design,” said Drew Prairie, director of corporate communications at AMD.

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AMD Lone Star campus in Austin, Texas. Image by Bizjournals

In addition, AMD plans to reorganize its EESC business unit. The new structure will consist of three enterprise solutions teams, which will manage business, engineering and sales. The company hopes that the new organization will be able to better respond to current challenges.

AMD will once again streamline its computing and graphics sales structure by focusing its teams on its priority customers, markets, and geographies. In addition, to bolster operations in China and Europe, the company is creating two regional president positions. Spencer Pan will become AMD’s president responsible for Greater China, whereas Darren Grasby will be AMD’s president in EMEA. Both executives are long-time AMD veterans.

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KitGuru Says: While it is sad to see that certain people will have to leave AMD, it is noteworthy that the company does not fire engineers or sales personnel. It is also good to see that AMD is adjusting its day-to-day operations in a bid to maximize its efficiency.

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4 comments

  1. So much stress for those guys who are working in AMD.AMD is paying less and asking much form there employees.A bad company to work for.

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  3. AMD, here’s a list of who you should consider firing immediately without a penny in severance:

    1. David Kenyon, VP Business Management and Operations
    A Harvard alum with CxO ambitions, Kenyon leads the so-called “Center of Excellence”, a motley crew of pricing, planning, sales operations, training and analytics geeks who supposedly own delivering the in-quarter number. Given he has missed the last 16 quarters does not bode well for him. Reports indicate he is already on his way out along with his cohorts.

    2. Matthew “Matt” Zielinski, VP and GM MNC Sales and Marketing
    Zielinski heads the sales teams targeting major accounts (HP, Lenovo, Dell and others). A 9-year AMD veteran he previously owned the HP account and saw its decline by over 70% in three years. A champion of end-of-quarter deals, he pioneered what AMD insiders called HOIs which basically involve stuffing product into HP’s locations at dirt cheap pricing and recognizing revenue in order to make his sales quota.

    3. Matt Skynner, VP and GM Graphics BU
    A Canadian based in ATI’s Markham office, Skynner has been in the graphics business a long time. Unfortunately he has neither the charm nor the geek to pull off the job. He has repeatedly failed at winning share from NVidia and has an army of PR whiz kids to drum up hype for AMD graphics. Matt, your business is going down the tube, eh?

    4. Roy Taylor, VP Strategic Partnerships
    What do we say about Roy? He has put his foot in his mouth more times this year than I changed my kid’s diaper. An NVidia reject, Roy has been shuttling between jobs at AMD and this latest gig has done nothing to reverse his luck with faux pas.

    5. Jane Roney, VP BU Operations
    Jane is Lisa’s right-hand person since FreeScale and most recently VP of BU Operations. She has been rumored to splurge on first class travel to customer meetings in Europe despite having zero impact on the outcome of those meetings. Her abrasive, holier than thou attitude can be mistaken for your typical type A and has made her quite the butt of jokes among employees. Unfortunately she brings very little value to the company and her impact is immaterial at best.

  4. Starting October AMD is eliminating all POS funding to retailers worldwide such as Wal-Mart and Best Buy. Insiders suggest they are already scraping the bottom and funding is down over 50% vs 2014.. In addition sources within the BU say Zen is delayed again and will not be on shelf until at least early Q1 2017 by which time Intel will have leapfrogged it. Good luck, AMD!