Cuts, trendy gadgets will get Sony back on track, pledges CEO

TOKYO: Sony projected yesterday that it would report its first annual net loss in 14 years, and chief executive Howard Stringer vowed to turn around the company with pay cuts, job reductions and trendier gadgets.

"The massive economic upheaval being experienced across the globe is sparing no one in the consumer electronics world," Stringer said at Sony's Tokyo headquarters after it announced the earnings revision.

Battered by slumping sales and a strong yen, the Japanese electronics and entertainment company expects to sink into a 150 billion ($3.195 billion) net loss for the fiscal year through March, a reversal from 369.4 billion profit the previous year.

To cope with the slowdown, Sony said last month it would cut 8000 of its 185,000 jobs around the world and shut five or six plants - about 10 per cent of its 57 factories. It would also trim 8000 temporary workers not included in the global work force tally. Sony said yesterday it planned to cut a further 1000 temporary workers in Japan and close one of two domestic TV plants.

Sony also will offer early retirement packages to its regular, full-time workers in an effort to cut 30 per cent of its personnel costs in its TV business by March 2010. It refused to give a head count but said they were part of the 8000 job cuts announced earlier.

Stringer also said he and two other top executives, including President Ryoji Chubachi, would give up their entire bonus, reducing their annual pay by half. Other executives and managers would see lower pay.

Stringer said such steps weren't enough. Sony needed to be more aggressive in cutting costs by avoiding redundancies, streamline the supplier chain and anticipate the trends in internet-linking gadgets like the interactive TV set, he said.

"There is still a lot of the old Sony, and not enough of the new Sony," he said, acknowledging intense competition from growing rivals like Samsung Electronics, Apple and Microsoft.

Stringer said he was aware of the relatively protective lifetime employment regulations in Japan for full-time workers, adding the company would "tread very, very carefully".

Sony, which makes the Walkman player and PlayStation 3, also lowered its sales forecast for the fiscal year through March to decline 13 per cent to 7.7 trillion yen. In October, it had expected 9 trillion in sales.

The efforts announced yesterday are expected to save Sony 250 billion for the year ending March 31, 2010, but the restructuring measures will cost 170 billion.

 

Source : http://www.nzherald.co.nz/

Sony staff cuts unlikely to affect games division

Filed under: Sony PlayStation 2, Sony PlayStation 3, BusinessHere's a bit of good news after hearing about job losses in Microsoft's Gamerscore Blog team: Sony says that cuts coming to the company are least likely to come from the gaming division, according to GamesIndustry.biz. The comments were, of course, made in reference to Sony's talk yesterday of restructuring, after it expected to post $2.9 billion-with-a-B in annual losses.A spokesperson for the company told GI.biz, "As was the case with... Full Story

Source : http://www.examiner.com/

Craig Barrett: Intel chairman is 'quintessentially a Silicon Valley CEO'

As the leader who revamped Intel's manufacturing processes and invested billions in new facilities around the world, departing company Chairman Craig Barrett will be remembered for his competitive spirit and willingness to take risks.

His commitment to promoting technology education in developing countries and his support for high-tech research also are renowned — as are his marketing stunts. How many other high-tech execs have performed an onstage duet with a rock star at an electronics trade show?

Barrett, 69, announced his retirement as Intel's chairman Friday.

"Craig Barrett is quintessentially a Silicon Valley CEO. Pragmatic, results-oriented, egalitarian and mission-driven," said Carl Guardino, who heads the Silicon Valley Leadership Group, where Barrett served as a board member from 1996 to 2005.

But, Guardino said, Barrett has a big heart beneath his take-charge exterior. "Some perceive him as so business-oriented that they never get past that very pragmatic shell to the incredibly giving and community-minded person that he is."

After 35 years with Intel, including seven as its CEO, Barrett stepped down from that position in May 2005 to became chairman of the board. In a carefully planned transition characteristic of Intel, Paul Otellini, formerly the company's chief operating officer, became president and CEO.

Barrett holds bachelor's, master's and doctoral degrees from Stanford University, and taught materials

science there before joining Intel in 1974 as a technology development manager. He was made a vice president in 1984, and after more promotions was elected to the board of directors in 1992. In 1993 he was named chief operating officer, became Intel's fourth president in 1997, and chief executive in 1998.

Barrett, who has authored a textbook called "Principles of Engineering Materials" and written more than 40 technical papers, brought a professor's rigor to reworking Intel's manufacturing operations. He developed the company's "copy exactly" process, in which every chip plant is designed with the same exacting formula. Even the paint on the walls of the fabrication plants is specified.

"Craig has definitely been one of the true visionaries with regard to improved manufacturing methodologies and their implementation in the semiconductor industry," said George Scalise, president of the Semiconductor Industry Association, who has known Barrett for about 25 years. "He's made huge contributions both to Intel and the industry."

But even visionaries like to mix it up. Barrett, known for a dry wit if not a strong singing voice, wailed "Walk This Way" with Steven Tyler, frontman of the rock band Aerosmith, on stage at the Consumer Electronics Show in 2005. And many in the valley remember when, in 2004, he got down on his knees to jokingly ask an audience forgiveness for an Intel product snafu.

Stunts aside, Scalise said Barrett has "been tireless in his efforts to bring funding for basic research to universities." Barrett is a member of the SIA's board, co-chairs the Business Coalition for Student Achievement, and has been active in promoting health care technology for seniors.

Many regard Barrett as a sort of statesman for the technology industry. He has reportedly traveled to more than 60 countries, and he chairs the United Nations Global Alliance for Information and Communication Technologies and Development.

Intel officials did not specify what Barrett's post-chairmanship plans are, and Barrett, who lives in Arizona, was not available for comment Friday. Friends say he is an avid skier and mountain biker, and loves to fly fish in Montana, where he has a ranch.

But if his remarks during a keynote speech at the CES earlier this month are any indication, he is unlikely to cut short his work promoting technological development in poor countries. Urging the crowd to get involved, he said, "Lots of work has been done, but lots more needs to be done."

 

Source : http://www.mercurynews.com/

Biz break: Valley jobless rate climbs to 7.8 percent; California rate up to 9.3 percent

The Silicon Valley region shed 6,100 jobs in December and the unemployment rate jumped to 7.8 percent — the highest in six years — with part of the damage taking place in the retail trade sector, state employment officials reported today.

That's up from 7.2 percent in November, the first month since July that the region posted a monthly loss of jobs. The last time there were this many unemployed in Santa Clara and San Benito counties was December, 2002, according to state Employment Development Department labor market analyst Janice Shriver.

The valley now has 910,600 workers, down from 921,600 a year ago and 916,700 in November.

The EDD also released job figures today for the state. California's seasonally adjusted unemployment rate grew to 9.3 percent; nationally, the rate was 7.2 percent during the holiday season.

Barrett stepping down: Craig Barrett, the 69-year-old chairman and former chief executive of Santa Clara computer-chip giant Intel, will retire from the company in May at the firm's annual stockholder meeting, Intel announced today.

Jane Shaw, who joined the Intel board in 1993, will replace Barrett as the board's chairperson. But unlike Barrett, she will not also have day-to-day responsibilities for helping manage the company, said Intel spokesman Chuck Mulloy.

 

Barrett, who joined Intel in 1974 and served as chief executive officer from 1998 through 2005, said in a prepared statement issued by the company that he was fortunate to have been able to work at Intel with such industry legends as Bob Noyce, Gordon Moore and Andy Grove.

Southwest triggers sales on late-winter fares: Major airlines moved today to match a fare sale started by Southwest Airlines, as the carriers worry about weak demand for travel during a recession.

Southwest said that through Monday it would sell seats to almost everywhere it flies starting at $49 to $99 each way. Tickets must be bought at least 14 days before flying, travel must be completed by March 11 and seats are limited, the airline said.

AMR's American Airlines, Continental Airlines, US Airways Group and JetBlue Airways matched the Southwest prices, officials at those carriers said. UAL's United Airlines has its own fare sale that began on Jan. 16, said spokeswoman Robin Urbanski.

Delta Air Lines also appeared to match the Southwest move. Delta posted a system wide fare sale on its Web site that runs through Monday — same as the Southwest sale. A three-day sale by AirTran ended Thursday night.

Silicon Valley tech stocks:

Up: Cisco, Genentech, Google, Hewlett-Packard, Intel and Yahoo

Down: Exponent, Spansion and Varian Medical

The tech heavy Nasdaq composite index: Up 11.80, or 0.81 percent, to 1,477.29.

The blue-chip Dow Jones industrial average: Down 45.24, or .56 percent to 8,077.56.

And the Standard & Poor's 500 index: Up 4.45, or .54 percent, to 831.95.

 

Source : http://www.mercurynews.com/

Intel's Barrett to step down

Craig Barrett, Intel's 69-year-old chairman and former chief executive, will retire in May, the company announced Friday. But analysts and others familiar with the Santa Clara computer-chip giant said they don't believe the move signals major changes for the company.

Jane Shaw, who joined the Intel board in 1993, will succeed Barrett as board chair. Unlike Barrett, she will not also have day-to-day responsibilities for helping manage the company, Intel spokesman Chuck Mulloy said. While the company doesn't have to fill Barrett's vacancy, he said it probably will do so and conduct a formal search for a candidate.

Mulloy added that Shaw will be Intel's first chair since Arthur Rock, who assumed the post in 1968, to serve without some ongoing or prior management experience at the chip maker. But he noted that she is well acquainted with Intel because of her lengthy board tenure.

Barrett, Shaw and Intel Chief Executive Paul Otellini could not be reached for comment. But Barrett, who joined Intel in 1974 and served as chief executive from 1998 through 2005, said in a prepared statement that he was fortunate to have been able to work at Intel with such industry legends as Bob Noyce, Gordon Moore and Andy Grove.

"Intel became the world's largest and most successful semiconductor company in 1992 and has maintained that position ever since," said Barrett, who lives in the Phoenix area and has regularly commuted to Santa Clara as chairman. "I

have every confidence that Intel will continue this leadership under the direction of Paul Otellini and his management team."

The statement also quoted Otellini as praising Barrett, who chairs the U.N. Global Alliance for Information and Communications Technology and Development, and has been active in issues such as education, health care and U.S. competitiveness.

"He has been my colleague, supervisor, mentor and friend for these 35 years. I wish him the very best as he moves on to the next chapter in his life," Otellini said.

Intel's co-founder, Moore, a past chief executive and chairman of the company, noted that Barrett hasn't been deeply involved in the chip maker's daily operations lately. Instead, he said, "Craig has been going around the world touting the importance of education and how computers can help with that."

Moore noted that Barrett generally had been known for acquiring companies and branching into new markets, while Otellini has largely narrowed Intel's focus and cut costs. On Wednesday, Otellini announced that the company was laying off at least 5,000 employees and closing five manufacturing plants, including one in Santa Clara.

Moore said that probably doesn't reflect a major difference of opinion between Barrett and Otellini, adding that Barrett might have been forced to scale back his expansion plans if he had been CEO during the recent economic slowdown.

Nathan Brookwood, a research fellow at the Saratoga market consulting firm Insight 64, agreed that Barrett's retirement probably doesn't reflect a major shift for the chip maker, adding, "I wouldn't see this as having any impact on the company's day-to-day operations."

 

Source : http://www.mercurynews.com/

AMD Letting Production Slip Below Demand

If in the next few months you have a problem finding an AMD processor to buy, there's a reason.

AMD executives acknowledged Thursday that they plan to let existing inventories in the reseller channel deplete, and then manufacture fewer processors than its customers demand, so as to not be stuck with excess inventory.

AMD lowered its manufacturing rates during the fourth quarter, in part to reduce its inventories in response to flat or down market demand, Rob Rivet, AMD's chief financial officer, told investors in AMD's fourth-quarter conference call Thursday afternoon. AMD reported a loss that exceeded revenue.

"We're slowing everything down quite a bit," Rivet said.

Neither Rivet nor AMD's president and chief executive Dirk Meyer indicated whether or not such manufacturing cutbacks would be across the board, or just in particular segments. Meyer alluded to a "severe industry correction in the IT supply chain, especially in notebooks," and both executives indicated that supply and demand were out of whack in the notebook segment.

Meyer, however, did confirm that AMD would deliberately not meet demand. "I was just going to put a point on that by saying you know, we think our CPU sales out of AMD will be less than consumption… our inventories will drain in Q1 – we'll clearly be manufacturing below our shipment level," he said.

That would leave the market open to Intel, which reported relatively healthy revenues for the fourth quarter, but has been been rumored to be facing its first loss in more than two decades. AMD's actions of late, where the company has dropped its microprocessor prices to match Intel's quad-core price cuts, have until now seemed to be the actions of a chip company concerned more with its market share than anything else.

 

Source : http://www.pcmag.com/

Intel Denies Trying To Derail AMD Spin Off

Intel (NSDQ: INTC) on Friday denied claims from rival Advanced Micro Devices (NYSE: AMD) that the larger rival is trying to derail AMD's plans to spin off its manufacturing operations.

The two companies started trading barbs Thursday when AMD sent an e-mail pointing news organizations to a filing with the Securities and Exchange Commission that disclosed AMD had received a formal letter from Intel requesting a meeting on the current cross-licensing agreement between the rivals.

 

Intel contends that the separate manufacturing company AMD plans to form with the Advanced Technology Investment Co., formed by the Abu Dhabi government, would not be covered under the agreement, and the two companies need to enter negotiations to come up with a separate deal. AMD, on the other hand, believes the spin-off qualifies as a subsidiary, which would be covered under the agreement.

"We believe that the letter is another attempt by our competitor to cause uncertainty as we approach our Asset Smart deal closing next month," AMD spokesman Drew Prairie said in the e-mail. Asset Smart is the marketing term AMD uses for its spin-off strategy.

Intel on Friday denied it was trying to stop AMD's plans with ATI. The letter was meant as a formal request for a meeting, since AMD has ignored Intel's other requests, an Intel spokesman told InformationWeek.

"Intel has not and does not intend to block or any other way hinder the formation of the Foundry Co.," the Intel spokesman said. "What we're concerned about is the licensing rights."

He insisted that Intel is looking to settle the disagreement. "We certainly would be open to discussion and finding a way to resolve this," he said.

The Foundry Co. is the temporary name of the business AMD plans to open with ATI next month. The manufacturing company would handle AMD's processor production, as well as that of other chip-design firms. AMD would have a 34.2% stake in the company with ATI controlling the rest. AMD would receive $700 million from ATI in the deal.

AMD sent the e-mail the same day it reported a $1.4 billion loss in the fourth quarter and a 33% drop in revenue, which the chipmaker blamed on the slump in the PC market brought on by the global economic downturn. While AMD's loss was large, it was narrower than the same quarter a year ago.

Intel last week reported that fourth-quarter profits plunged 90% and revenue fell 23% as a result of the economic slowdown.

 

Source : http://www.informationweek.com/

AMD reports $1.4B loss, 35% revenue decline

As expected, AMD Inc's Q4 2008 showed significant declines in revenue and an increase in loss for the struggling MPU maker.

December quarter revenue of $1.162 billion was down 35% sequentially and 33% year over year. Net loss of $1.424 billion compared to a $127 million loss in Q3 and a $1.772 billion loss in Q4 2007.

"The fourth quarter of 2008 is going to be remembered for the severe stresses placed on the global economy and on our industry," AMD CEO Dirk Meyer (pictured) said on the company's earning call Thursday afternoon. "The global economic environment led to a softening in end-user demand for PCs and servers and what is usually the year's strongest quarter.

"In addition, we saw the beginning of a severe inventory correction across the IP supply chain, particularly acute in notebooks and one that is continuing into this quarter. The effect on the economy is going to continue to dampen end-user demand, the degree to which is uncertain. This combination makes the future particularly murky."

Q4 capped off a difficult year for AMD, marked by several cost-cutting actions. A 10% layoff in April 2008  was followed by a 600 headcount reduction in November of the year. After failing to hit profitability and on multiple quarters of revenue decline, the company also announced it would spin off its manufacturing assets   into a separate company in October. Further, AMD announced it would sell off non-core businesses, including its DTV and handset units, as it looked to focus on its strengths and to cut costs. AMD concluded the sale of its DTV group to Broadcom for $141.5 million in October and earlier this week announced the sale of certian handset and multimedia technologies to Qualcomm for $65 million.

On such actions, AMD announced in its earnings report that it has lowered its breakeven from $1.5 billion to $1.3 billion.

For the year ended December 27, 2008, AMD recorded revenue of $5.808 billion, down compared to 2007 revenue of $5.858 billion, and a net loss of $3.098 billion, lower than its 2007 net loss of $3.379 billion.

"In light of current macroeconomic conditions, very limited visibility and continued inventory corrections in the supply chain, AMD expects first quarter 2009 revenue to decrease from the fourth quarter of 2008," CFO Bob Rivet said on the call, noting that he expects AMD to meet the new breakeven in Q2.

Rivet estimated 2009 R&D will be about $300 million a quarter, down from the $325 million AMD estimated at its November analyst day. "This reduction does not compromise our roadmap," he insisted. "Capital expenditures have been reduced to about $45 million per quarter, roughly half of what we discussed at the analyst day. Now, that's the foundation of AMD, the product company, based on the expected February close of the asset-smart transaction."

AMD fielded questions on the call regarding Intel Corp's expressed concerns on the manufacturing asset spin off. The two chip making rivals have a long-standing x86 licensing agreements that allow them to use certain technologies without legal ramifications. Intel has questioned how AMD will act in accord with those agreements once its manufacturing assets are spun off into a separate company.

Rivet said on the call that Intel's concerns are not a condition of AMD closing its Foundry Company deal, which is expected to conclude within 48 hours of AMD's February 10 shareholders meeting. He also said that the spin out will be "consistent with the terms of all our IP licensing agreements."

Adding to that Meyer said, "The term, our license to Intel patents are perpetual, meaning the patents to which we're licensed and they're licensed are licensed forever. The agreement does expire and we expect we'll renegotiate it as we did earlier in this decade. But the licenses persist."

Meyer expects AMD and Intel to renegotiate over the next few quarters.

Although AMD management expects the foundry spin out to reduce operating expense by $1 billion a year compared to its current run rates, industry watchers are still on the fence as to whether the move will give AMD the hand up it needs in terms of its finances.

"We still do not know the financial impact of AMD spinning out its manufacturing assets to [form the] Foundry Co," Craig Berger, a semiconductor market analyst at FBR Capital Markets, said in a report this morning. "Management says quarterly operating expenses will be $525 million, a positive, though gross margins remain undetermined. Depending on the financial impact of its manufacturing spin out, AMD could still have cash and liquidity problems in 2010."

In terms of Q1 outlook, AMD, like Intel, did not give a specific Q1 revenue estimate in its earnings report. FBR estimated that AMD's revenues will decline 12% sequentially to $1.02 billion and operating expenses declining 11% sequentially.

Source : http://www.edn.com/