AMD said it will cut its workforce by 15 percent in a bid to reduce operating expenses as it struggles with a consumer shift toward tablets and weak PC sales.
The company today announced revenue for the third quarter of 2012 of $1.27 billion, a net loss of $157 million, or $0.21 per share, and an operating loss of $131 million. The company reported a non-GAAP net loss of $150 million, or $0.20 per share, and a non-GAAP operating loss of $124 million.
"The PC industry is going through a period of very significant change that is impacting both the ecosystem and AMD," said Rory Read, AMD president and CEO. "It is clear that the trends we knew would re-shape the industry are happening at a much faster pace than we anticipated. As a result, we must accelerate our strategic initiatives to position AMD to take advantage of these shifts and put in place a lower cost business model. Our restructuring efforts are designed to simplify our product development cycles, reduce our breakeven point and enable us to fund differentiated product roadmaps and strategic breakaway opportunities."
AMD's first generation A-Series Accelerated Processor Units (APUs) ("Llano") had weaker-than-expected demand. The company's 'Computing Solutions' segment revenue decreased 11 percent sequentially and 28 percent year-over-year.
AMD's graphics segment revenue decreased seven percent sequentially and 15 percent year-over-year. Graphics processor unit (GPU) revenue decreased 14 percent sequentially due to lower unit shipments to OEMs partially offset by higher channel sales.
AMD also announced a restructuring plan, which will be mainly implemented in the fourth quarter of 2012 and will include a workforce reduction and site consolidations.
The company expects that the restructuring actions taken in the fourth quarter of 2012 will result in operational savings, primarily in operating expenses, of approximately $20 million in the fourth quarter of 2012 and approximately $190 million in 2013. The savings will be largely driven through a reduction of AMD's global workforce by approximately 15 percent, which is expected to be completed in the fourth quarter of 2012. The company currently estimates it will record a restructuring expense in the fourth quarter of 2012 of approximately $80 million in connection with these actions.
"Our restructuring efforts are decisive actions that position AMD to compete more effectively and improve our financial results," said Mr. Read. "Reducing our workforce is a difficult, but necessary, step to take advantage of the eventual market recovery and capitalize on growth opportunities for our products outside of the traditional PC market."