My friends work there because of golden handcuffs.
I can't speak as to the ATI division, but, yes, the processor division is doomed. You don't have to believe me. Look at their track record for the last 8-10 years, and keep in mind that any new microarchitecture that is sold takes 2-3 years of design time. Then look at their 10K's, their desperation moves (selling the fab, Arab investors, etc.), the well-publicized defections (Fred Weber, etc.) and put it all together. Look at the benchmarks over time. Look at their stock over time. If you choose to write off my statements, there are plenty of objective facts out there for you.
Sometimes a duck is a duck, and the fact that I am an ex-AMD employee calling it a duck doesn't make it any less of a duck.
AMD's stock is rising Cmaier. Over the last two years it has been an net positive trend.
We can put similar cases together with other companies around the world. I don't think AMD is going to go the way of Palm.