fatrix Exclusive: AMD to Announce Another 5% Employee Reduction?

At approximately the same time last year, AMD management announced Project WIN, which many of the people thought it was a strategy to get the company to its winning ways. Rather than that, it was a purge of around 5% of the company, with many of key executives and engineers being shown the door.

Many insiders viewed Project WIN as a mistake, given that some of the engineers that left were at odds with the interim CEO and CFO Thomas Seifert, and the project was actually set in motion before Rory Read joined the company. That headcount reduction triggered syphoning of minds away from AMD, with companies such as Samsung (Austin, TX), Huawei or Qualcomm (Toronto Area) all opening up extra offices or even locations in order to gain talent.

As the time went by, new executives joined the company and apparently were met with quite a lot of resistance in terms of projects being realized. While it took for some time, it seems that both the executive team and the Human Resources department came to inevitable conclusion – the company is too big for the amount of projects at hand. According to our sources close to heart of the matter, we heard that "the company has too many VPs and directors who slow things down. New hires cannot fulfill their targets due to amount of bureaucracy."

This was supported by the lowered outlook, which is being rumored among the financial institutions and company insiders alike. AMD apparently did not have a "happy third quarter", with the sales coming short of predicted. However, with the launch of AMD Virgo platform (Trinity for Desktops) and refreshed Scorpio with Vishera processors, fourth quarter should look much better.

Once the reductions are completed, AMD should be a leaner company, reducing it from the current headcount of approximately 11,000 people to a sub-10,000 company. Rory's vision about turning AMD into an top-to-bottom SoC vendor doesn't have a lot of fans inside the company, but the company needs to learn how to scale from low-power to high-performance parts if its to capture market share and more importantly, increase the mindshare. Future graphics parts such as Volcanic Islands (2014) or Pirate Islands (2015) offer incredible amount of integration with the CPU cores, but the company needs to have products that can feed the monster GPUs of today/tomorrow.

AMD representatives were unavailable for comment at press time.