Thursday, August 23, 2007

The first head to roll

Henri Richard - chief sales and marketing honcho at AMD quit today.

Link 1
Link 2

Sales and marketing will now directly report into Hector. Heads have started to roll at the Jolly Green Giant. When you miss your revenue target quarter on quarter, the first person to blame is your sales guy. Of course, can you blame him if you are obsessed with winning market share even though your current product line up is not competitive enough? A message must be sent - and it starts with Henri.

But what's pretty darn foolish is that Hector is now going to run sales and marketing. Intel must be laughing with glee. Hector now has to do two jobs which means it's highly likely neither will get done well. Or perhaps they're sad because the mistakes Hector has been making over the last few quarters as CEO are worth more to them.

Either ways, this is a signal. AMD needs to scale back their headcount. Another bad quarter or two and either Bob Rivet or Phil Hestor are probably going down. Bob - for constantly mis-leading Wall Street and not managing AMD's cost structure effectively. Phil - for not developing a product roadmap that was competitive enough or perhaps for building an architecture that was too difficult for AMD to manufacture.

I predicted an AMD stock price of 11.50 - 13.00. We're there now people. This is going further south. Over the next 6 months this is going below 11.


Anonymous said...

$11/share is likely the bottom (or maybe $10) - at that point the stock gets propped up by the inevitable rumors of buyout or private equity (though it is a lot harder in current credit environment)

"Hector now has to do two jobs"

What are you talking about - Hector doesn't do anything now! (It just means he may get a bigger bonus or golden parachute!)

Richards failure was during the K8 days not right now where the only marketing he can do is "we're cheap" and "Intel's a monopoly" (he's stuck putting lipstick on a pig).

With K8, prior to Core2, he (and AMD) had an opportunity where AMD had a better and usually cheaper product - that is where AMD should have been able to establish a name as opposed to being the 'underdog nibblng into Intel's market share'

And the timing is RIDICULOUS, is AMD trying to divert attention away from "THE MOST IMPORTANT LAUNCH OF 2007" (in AMD's words)?

Unfortunately you are probably right about this being the first head to roll, er... I mean 'resign' :) It is unfortunate because Ruiz should have been the first and some of the execs are doing a decent job but are getting put behind the eightball with ridiculous expectations (K10 schedule, K10 initial performance, 65nm and 45nm schedules)

Axel said...

I don't believe that Henri was fired. Not having an immediate replacement implies that Henri left largely of his own volition. Hector would be nuts to assume both jobs: he knows it's impossible to effectively evangelize Barcelona to clients around the world while simultaneosly running the company. I'm sure he'll scrape someone up in the next couple weeks and put him/her through a crash course in Henri's role and meet all of Henri's contacts, but not having an immediate replacement is a strong indication that this wasn't Hector's doing.

No, the more likely story is that Henri simply saw the writing on the wall, which is that K10 will not have enough IPC gain over K8 to compete with Penryn and raise ASPs to where they need to be to turn the ship around. He cashed out before the stock begins to really tank.

Anonymous said...

In a statement, Richard said he has decided to make a move to "a different business segment."

"I am leaving AMD at a time when the company is in position to break the monopoly that plagues this industry. I am immensely proud of my contribution to AMD, and in particular, of the strong team I leave behind."

Funny how despite being so proud of his work, and it being a time where AMD is in a position to break the dreaded monopoly, he decides to bail out? One would think he would want to see the fruits of his contributions, no?

Of course the fruit has spoiled and rotted with his lies, deceptions and exaggerations, so then again maybe it is the right time to head for greener pastures.

Roborat, Ph.D said...

One possibility:

Henri had to leave before the Barcelona lauch because he promised a lot in the past about K10 and now doesn't want to be around defending those lies.