AMD's new chief executive officer Lisa Su has announced a somewhat rocky start to her new job: the loss of more than 700 jobs at the company, equivalent to seven per cent of its overall workforce.
AMD's most recent financial report, covering the third quarter of its 2014 financial year, show tight margins of just 35 per cent and a decrease in revenue to $1.43 billion - down two per cent year-on-year. Although the company has managed to to stay in the black, it has done so by the skin of its teeth: its operating income for the quarter was a mere $63 million, down from $95 million in the same period last financial year. The blame, Su claimed in a statement on the matter, can be laid at the door of 'challenging market conditions that require us to take further steps to evolve and strengthen the performance of [the Computer and Graphics segment] business.
A break-down of the financials bears that out: while the company's Enterprise, Embedded and Semi-Custom business arm earned a nice $108 million operating income for the company - up from $97 million last quarter and $92 million year-on-year - the Computing and Graphics division lost $17 million over the same period, down from a $6 million loss in the previous quarter and a $9 million profit year-on-year. At the end of the financial period, the company remained $2.2 billion in debt.
With figures like that, and a warning from Su that evolution is due, it's perhaps no surprise to hear that there will be cuts at the company. A restructuring plan due to complete by the end of the year reveals that seven per cent of the company's global headcount, more than 740 employees, are to be let go, while the company's real estate portfolio is to be reduced - which means the closure and sale of fabs and offices. While it will result in short-term costs - $57 million this year, largely in severance payments, and a further $13 million in the first half of next year - the company hopes to save $9 million this year and a whopping $85 million over the next financial year.
'While decisions that impact the size of our global team are never entered into lightly,
' Su claimed, 'this is the right step to ensure we prioritise our resources and engineering investments in our highest-priority opportunities that can drive improved profitability and long-term growth.
Additional figures from the company's latest financial report are available in the official press release
An earlier version of this article stated that 10,000 jobs were to be lost, equivalent to AMD's entire global workforce, an error on the author's part for which he will be duly punished and for which he apologises profusely.