Just a week after AMD CEO Rory Read stepped down, to be replaced by COO Lisa Su, the company has announced that it will layoff around 7 percent of its global workforce in an effort to improve its profitability.
The announcement came as the company reported disappointing third-quarter results, with revenue of $1.43 billion, down 2 percent yearly, and net income of $17 million, or 2 cents a share. On a non-GAAP basis, AMD reported net income of $20 million, or 3 cents a share, missing analysts’ estimate of 4 cents a share.
“AMD’s third quarter financial performance reflects progress in diversifying our business”, said Su, adding that the company’s Enterprise, Embedded and Semi-Custom divisions were strong, but the Computing and Graphics division, responsible for desktops and laptops GPUs, suffered during the quarter.
The division’s revenue decreased 6 percent from last quarter and 16 percent year-over-year, something AMD attributed to weaker chipset and graphics processor sales which in turn was due to weak demand for laptops. The operating loss for the division stood at $17 million, compared to $6 million reported in the last quarter and $9 million in Q3 last year.
The outlook for Q4 isn’t good either, with the company expecting a revenue drop of 13 percent (plus or minus 3 percent) compared to Q3.
AMD currently has around 10,149 employees, which means around 710 people will be laid off. The job cuts, most of which will be on the operation side, will be complete by the end of the year, and will save the company about $9 million this year and $85 million in 2015. “We know what we need to do to improve performance going forward, and are taking actions”, Su said.
