AMD focuses on AI and combating Nvidia's expansion… by laying off 4% of its workers?

Focusing on AI and stopping the production of high-end graphics cards, those are the messages given by AMD a month ago to update their current status and their medium-term goal of competing with Nvidia in artificial intelligence and increasing their market share in the gaming GPU sector.

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Advanced Micro Devices (AMD) is going to lay off 4% of its global workforce, about 1,000 employees, while directing its resources towards the development of AI-focused chips. This is a strategic shift for AMD to counter Nvidia’s leadership in the sector.

“As part of aligning our resources with our greatest growth opportunities, we are taking a number of specific actions that will unfortunately result in the reduction of our global workforce by approximately 4%,” reported CRN citing an AMD spokesperson.

“We are committed to treating the affected employees with respect and assisting them in this transition,” added the spokesperson in a message quite empty of meaning. However, it is still unclear which departments will suffer the majority of the layoffs.

AMD lays off 4% of its workforce

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— TechCrunch (@techcrunch.com) November 13, 2024, 18:15

Net profits, business growth, and layoffs: AMD cannot justify this 4% cut

The latest layoffs were announced at the same time as the quarterly earnings of AMD reflected solid results: a strong increase in revenue, as well as in net profit.

However, in a deeper analysis, the third-quarter results showed both strengths and challenges: while total revenue increased by 18% to $6.8 billion, gaming chip revenue plummeted 69% year-over-year, and embedded chip sales fell 25%.

In her recent earnings call, AMD CEO Lisa Su emphasized that the data centers and AI business is now fundamental to the company’s future, and expects a 98% growth in this segment for 2024.

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Lisa Su attributed the recent revenue increases to orders from customers like Microsoft and Meta, which are now adopting AMD’s MI300X GPUs for internal workloads.

The tech sector only knows how to lay off, with Intel leading the way, a company that has already eliminated approximately 15,000 positions as part of its restructuring efforts (and cost savings, of course).