Embattled computing business Advanced Micro Devices (AMD) has decided to cut its local operations and will manage the South African market primarily from Dubai.
Following the example of many international businesses, AMD has closed the local office and will manage local sales and marketing as it did before the South African operation was installed. Local country manager Imi Mosaheb has already resigned to “pursue a new venture”.
Mosaheb joined AMD in 2002 as a product manager in the strategic sales and marketing division, and was promoted to senior-level management in less than five years. Since his instalment at the local office in 2007, his office has shown exceptional growth, with several financial results showing around 30% year-on-year growth figures.
Dr Gaith Kadir, AMD EMEA sales director, managed the South African market before the local office was set up and will now take on that responsibility again. “We have decided to make the Johannesburg operation a rep model. I will be in the country monthly to handle the sales of the local market,” he says.
He adds that the company is negotiating a contract with a South African agent, who will be chiefly responsible for the marketing of the business. “The agent we are negotiating with is a South African person who will handle the day-to-day operations and I will be there as a support.”
According to Kadir, none of the local projects or partners will be abandoned, and the company will continue to focus its attention on the local market. “SA is an AMD country. The customers and consumers are more advanced than most places and they understand the technology,” he notes.
He says the company's commitment to the country will not change, “we are only taking a different approach to the market”.
AMD has been battling to keep its finances in check over the last few years and has made some changes globally.
One of its most dramatic shifts was last year's sale of its manufacturing arm to a foundry business, in which AMD is now a major shareholder, alongside Abu Dhabi-based Advanced Technology Investment Company.
Chip manufacturing is notoriously expensive, particularly since equipment needs to be changed every time a faster chip is developed. At the time of the sale, many global analysts agreed the company's decision would help it to cut these costs.
However, AMD last week reported a net first-quarter loss of $416 million. Despite better than expected revenue, the company's profit has been sinking for some time.
Last year, the company set out to cut 10% of its global workforce and at the time, the five-man South African office felt a little insecure about job security. The global economic crisis has seen many multinationals cut out emerging market operations and pull resources closer to home.
With AMD's already struggling financial status, compounded with a looming recession, the loss of the South African office was inevitable, says one industry watcher, who has asked to remain unnamed.
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