AMD Announces Layoffs After Disappointing Q3 Results
AMD delivered its financial results for Q3 2012 today, and it's safe to say that things could have gone a lot better. GAAP revenue came in $1.27 billion, which is a 10% decline from the last quarter and a significant 25% decrease from the same time last year. AMD also posted a GAAP operating loss of $131 million, and a net loss of $157 million, which equates to a loss per share of $0.21.
Non-GAAP revenue for the quarter was at $1.27 billion – the same as GAAP revenue. AMD posted a non-GAAP operating loss of $126 million, compared to a non-GAAP operating income of $146 million for the same quarter a year ago. The company also had a non-GAAP net loss of $150 million and a loss per share of $0.20 – as you can probably imagine, that isn't good. Both AMD's Computer Solutions sector and Graphics unit were down sequentially and year-over-year, with Computer Solutions posting an operating loss of $114 million and and AMD's Graphics segment hitting an operating income of $18 million for the quarter.
AMD blames the poor performance this quarter to a "weaker consumer buying environment" and indeed, we've been hearing that PC sales on the decline while smartphone and tablet sales continue to grow. Because of this disappointing quarter, AMD has announced that it will be laying off approximately 15% of its global workforce, and this round of layoffs is expected to be mostly complete before the end of Q4 2012. In addition to laying off those workers, AMD will also be consolidating some of its worksites. Altogether, these restructuring efforts are expected to save the company $20 million in Q4 and $190 million in 2013.
Looking forward, AMD doesn't expect things to get much better. The company says it expects revenue to decrease a further 9% (plus or minus 4%) in Q4, so things will actually get a bit worse for AMD sequentially. It is, of course, never good to hear that people will be losing their jobs, but at this point, it sounds like those measures are necessary if AMD wants to climb out of this rut.