Subject: Processors | April 21, 2016 - 06:44 PM | Ryan Shrout
Tagged: restructure, Intel
Earlier this week Intel announced a major restructuring that will result in the loss of 12,000 jobs over the next several weeks, an amount equal to approximately 11% of the company's workforce. I've been sitting on the news for a while, trying to decide what I could add to the hundreds of reports on it and honestly, I haven't come to any definitive conclusion. But here it goes.
It's obviously worth noting the humanitarian part of this announcement - 12,000 people will be losing their job. I feel for them and wish them luck finding employment quickly. It sucks to see anyone lose their job, and maybe more so with a company that is still so profitable and innovative.
The reasons for the restructuring are obviously complex, but the major concern is the shift in focus towards IoT (Internet of Things) and cloud infrastructure as the primary growth drivers.
The data center and Internet of Things (IoT) businesses are Intel’s primary growth engines, with memory and field programmable gate arrays (FPGAs) accelerating these opportunities – fueling a virtuous cycle of growth for the company. These growth businesses delivered $2.2 billion in revenue growth last year, and made up 40 percent of revenue and the majority of operating profit, which largely offset the decline in the PC market segment.
That last line is the one that might be the most concerning for enthusiasts and builders that read PC Perspective. The decline of the PC market has been a constant hum in the back of minds for the better part of 10 years. Everyone from graphics card vendors to motherboard manufacturers and any other product that depends on the consumer PC to be relevant, has been worried about what will happen as the PC continues in a southward spiral.
But it's important to point out that Intel has done this before, has taken the stance that the consumer PC is bad business. Remember the netbook craze and the rise of the Atom product line? When computers were "fast enough" for people to open up a browser and get to their email? At that point Intel had clearly pushed the enthusiast and high performance computing market to back burner. This also occurred when management pushed Intel into the mobile space, competing directly with the likes of Qualcomm in a market that it didn't quite have the product portfolio to do so.
Then something happened - PC gaming proved to be a growth segment after all. Intel started to realize that high end components mattered and they made attempts to recapture the market's mind share (as it never lost the market share). That is where the unlocked processors in notebooks and "anniversary edition" CPUs were born, in the labs of Intel where gamers and enthusiasts mattered. Hell the entire creation of the Devil's Canyon platform was predicated on the idea that the enthusiast community mattered.
I thought we were moving in the right direction. But it appears we have another setback. Intel is going to downplay the value and importance of the market that literally defines and decides what every other consumer buys. Enthusiasts are the trend setters, the educators and the influencers. When families and friends and co-workers ask for suggestions for new phones, tablets and notebooks, they ask us.
Maybe Intel is just in another cycle, another loop about the fate of the PC and what it means. Did tablets and the iPad kill off the notebook? Did mobile games on your iPhone keep users from flocking to PC games? Have the PS4 or Xbox One destroyed the market for PC-based gaming and VR? No.
The potential worry now is that one of these times, as Intel feigns disinterest in the PC, it may stick.
Subject: General Tech, Processors, Mobile | November 20, 2014 - 12:36 AM | Scott Michaud
Tagged: x86, restructure, mobile, Intel
Last month, Josh wrote about Intel's Q3 earnings report. The company brought in $14.55 billion USD, of which they could keep $3.31 billion. Their PC group is responsible for $9 billion of that revenue and $4.12 billion of that profit, according to the Wall Street Journal. On the other hand, their mobile division is responsible for about $1 million – and it took over a billion to get that million. This has been the trend for quite some time now, as Intel pushes their square battering ram into the mobile and tablet round hole. Of course, these efforts could benefit the company as a whole, but they cannot show that in a quarterly, per-division report.
And so we hear rumors that Intel intends to combine their mobile and PC divisions, which Chuck Mulloy, an Intel spokesperson, later confirmed in the same article. The new division, allegedly called the “Client Computing” group in an internal email that was leaked to the Wall Street Journal, will handle the processors for mobile devices but, apparently, not the wireless modem chipsets; those will allegedly be moved to a “wireless platform research and development organization”.
At face value, this move should allow Intel to push for mobile even more aggressively, while simultaneously reducing the pressure from investors to give up and settle for x86 PCs. Despite some differences, this echos a recent reorganization by AMD, where they paired-up divisions that were doing well with divisions that were struggling to make a few average divisions that were each treading water, at least on paper.
The reorganization is expected to complete by the end of Q1 2015, but that might not be a firm deadline.
Subject: General Tech, Systems | October 6, 2014 - 11:27 PM | Scott Michaud
Tagged: restructure, layoffs, hp inc, hp, hewlett-packard enterprise
HP's restructure initiative has been ongoing for years, leading to tens of thousands of layoffs. This occurred in several phases, with low-margin businesses grouped alongside highly profitable ones. Originally, HP considered spinning off PC devices but later paired it with its highly profitable printing products.
Today, HP announced plans to split into two companies: HP Inc., the aforementioned PC and printing division, and Hewlett-Packard Enterprise, which will handle servers, networking, and other infrastructure as well as enterprise software and services. Shareholders will receive stock in both companies in an "intended to be tax-free" transaction. Obviously, that may vary by jurisdiction.
The reasons are fairly straight-forward. Print and PC are not heavily growing markets, especially not compared to their enterprise division. These two companies are roughly equal in size, so separating them highlights each side's strengths and weaknesses, and allows new investors to bet on one without giving money to the other. While Hewlett-Packard Enterprise is expected to be the higher-growth company, HP Inc. is expected to get into 3D printing as a consumer service. It will also inherit the logo, likely because it is something that consumers still identify with.
Current CEO, Meg Whitman, will be CEO of Hewlett-Packard Enterprise and Chair of HP Inc.
The "transaction" for shareholders is expected by the end of FY15. It will also align with the loss of 5000 jobs, resulting in 55,000 layoffs since Whitman joined the company. I have yet to hear anything about where these cuts will occur.
Subject: Editorial, General Tech, Graphics Cards, Processors, Chipsets | June 13, 2014 - 10:45 PM | Scott Michaud
Tagged: x86, restructure, gpu, arm, APU, amd
According to VR-Zone, AMD has reworked their business, last Thursday, sorting each of their projects into two divisions and moving some executives around. The company is now segmented into the "Enterprise, Embedded, and Semi-Custom Business Group", and the "Computing and Graphics Business Group". The company used to be divided between "Computing Solutions", which handled CPUs, APUs, chipsets, and so forth, "Graphics and Visual Solutions", which is best known for GPUs but also contains console royalties, and "All Other", which was... everything else.
Lisa Su, former general manger of global business, has moved up to Chief Operating Officer (COO), along with other changes.
This restructure makes sense for a couple of reasons. First, it pairs some unprofitable ventures with other, highly profitable ones. AMD's graphics division has been steadily adding profitability to the company while its CPU division has been mostly losing money. Secondly, "All Other" is about a nebulous as a name can get. Instead of having three unbalanced divisions, one of which makes no sense to someone glancing at AMD's quarterly earnings reports, they should now have two, roughly equal segments.
At the very least, it should look better to an uninformed investor. Someone who does not know the company might look at the sheet and assume that, if AMD divested from everything except graphics, that the company would be profitable. If, you know, they did not know that console contracts came into their graphics division because their compute division had x86 APUs, and so forth. This setup is now more aligned to customers, not products.
Subject: General Tech | January 20, 2012 - 06:24 AM | Tim Verry
Tagged: kodak, chapter 11, bankrupt, restructure, patents, cameras, photography
Eastman Kodak company has been on the rocky edges financially for some time and late last year there were rumors that Kodak would be filing for bankruptcy. Well, it looks like the company's financial position is now official, as they have filed for Chapter 11 bankruptcy and are working to restructure their US operations and become profitable. The company has paired with Lazard, FTI Consulting Inc and Sullivan & Cromwell to assist them in shaving down their business into a lean, mean, picture capturing machine. Under their Chapter 11 filing, Kodak will work to bolster liquidity by trimming down the business to its core and monetizing their "non-strategic intellectual property." The IP likely will involve Kodak selling off some of their non-core patents for imaging. After all, they have a catalog of 1,100 patents, so they definitely have plenty of room to work with in monetizing their assets.
According to Tom's Hardware, since 2003 the company has shut down 13 manufacturing plants, 130 processing facilities, and shed 47,000 workers. Further, to help with the restructuring process, they have obtained $950 million debtor-in-possession loan through Citigroup that will mature in 18 months. This should give the company enough cash to tide them over while they restructure and prepare to sell off certain assets. Kodak states that "Kodak aims to build company that will be successful in the marketplace – and a positive force in the communities we call home." It is important to note that the non-U.S. based operations of Kodak are not affected by the Chapter 11 bankruptcy filing.
Kodak has set up a web page to detail their restructuring efforts.