Seven percent of global workforce to go as part of new CEO Lisa Su’s reign
Chipmaker AMD has revealed a major restructuring of the company that will see the company shed around seven percent of its global headcount by the end of this quarter.
The cuts, announced as part of AMD’s third quarter 2014 financial results, will cost the company around $57 million in severance, but should help it save around $9 million by the end of this year, rising to around $85 million by the end of 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 the company’s CEO, Lisa Su.
Su, AMD’s former chief operating officer, (pictured left) replaced previous chief executive officer Rory Read last week in what many saw as a surprising move, meaning all eyes were on her first set of results.
Overall, AMD reported lower than expected revenues for the quarter, which fell two percent to $1.43 billion, and also said that it had cut its forecast for next quarter. It now expects a fall of 13 percent, plus or minus three percent, from the current quarter, which would equate to around $1.244 billion.
However, the company did report a net profit of $17 million, or 2 cents a share, in the third quarter, compared with a net gain of $48 million, or 6 cents a share, a year earlier.
Revenues from AMD’s Computing and Graphics division were just $781m, a 16 percent year-on-year decline, but there was better news in the Enterprise, Embedded, and Semi-Custom division, which makes server and embedded processors and semi-custom system-on-chips (SoCs), where revenues were up 21 percent from a year ago to $648m.
Shares in AMD were down five percent following the news.
“AMD’s third quarter financial performance reflects progress 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.”
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