AMD announced yesterday intentions to lay-off 10 per cent of its global workforce, along with the termination of existing contractual agreements, in an effort to make $200 million of operational savings in 2012.
AMD has spun this rather significant piece of news as the company optimising "cost structure to enhance competitiveness and accelerate growth". In other words AMD wishes to trim-the-fat so that it becomes mobile enough to invest significantly and responsively into future sectors, with the company showing particular interest in low-power and cloud markets.
Perhaps this sudden move is a reaction to ARM's recent low-power entry in to the server market or perhaps it has been planned for quite some time. With AMD looking to fund initiatives in 'emerging markets' with little specific direction, we have the feeling that the company is a little insecure and unsure at the moment of its position and is wanting to be ready to make a move as soon as the corporate gut provides it with a path to head down.
Traditionally AMD has always been the value-for-money choice, rarely do its CPUs outperform Intel's but with offerings often at a third of the cost, AMD has made a business for itself. On the other-hand, ARM processors, whilst falling safely short of high-end devices, are increasing in performance at a rate above the rest of the market, whilst maintaining low-cost and low-power consumption. With solid Linux and Android support and more significantly for the first time ever support in Windows 8, ARM devices could forseeability pose a significant threat to AMD in the not too distant future.
AMD expects most of the restructuring plan to take place during the final quarter of this year, with some loose ends continuing into 2012 with an overall expense of $105 million.
