AMD flounders

flounderThe surprise exit of Rory Read as CEO of AMD appears to have been explained as the company reported a lower-than-expected revenue forecast for the current quarter and announced job cuts.

Read cleaned out his desk,  handed over the keys to the executive drinks cabinet and his special poisoned chalice, to Chief Operating Officer Lisa Su this week. This sparked speculation that this quarter’s numbers were going to be bad.

AMD has seen its market value nearly halved since when Read took over in 2011 as the company lost market share to Intel.

Sure enough, in a statement, AMD reported third-quarter revenue and gave a forecast for current-quarter revenue, both of which missed expectations and its shares were down 5 percent in extended trade.

AMD said its revenue fell two percent to $1.43 billion in the third quarter, missing Wall Street expectations.

The company said its fourth quarter revenues would fall 13 percent, plus or minus three percent, from the September quarter. That would be about $1.244 billion.

Analysts on average had expected revenue of $1.47 billion in the third quarter and $1.48 billion in the fourth quarter

In response, AMD said that it was cutting seven percent of its workforce. This would be the outfit’s third major round of job cuts since 2011.

AMD said the cuts would be made by December and save about $9 million in the fourth quarter and $85 million next year.

AMD had 10,149 employees at the end of the September quarter.

AMD reported a net profit of $17 millionin the third quarter, compared with a net gain of $48 million a year earlier.

In the third quarter, AMD’s Computing and Graphics group, which includes processors for PCs, saw its revenue fall 16 percent year over year.