Amid challenges in competing with industry giants and navigating shifting markets, AMD has announced a workforce reduction of 4%, approximately 1,000 employees based on the company’s latest headcount of 26,000. The move reflects a strategic pivot as AMD focuses on what it calls “large growth opportunities” in emerging sectors.
“As a part of aligning our resources with our largest growth opportunities, we are taking a number of targeted steps,” an AMD spokesperson confirmed to CRN. The company emphasized its commitment to treating impacted employees with respect during the transition but declined to specify which divisions were most affected by the layoffs.
The announcement follows a mixed Q3 earnings report. While AMD reported increases in both revenue and profit, its gaming division suffered a staggering 69% year-over-year decline. The company also missed analysts’ expectations for the current quarter, adding to investor concerns.
The AI Battlefield: Nvidia’s Shadow Looms Large
A significant challenge for AMD lies in its struggle to carve out a share of the rapidly growing AI chip market, where Nvidia dominates. Despite impressive shipment numbers—224,000 GPUs estimated for 2024—AMD’s inventory hasn’t kept pace with demand from tech behemoths like Microsoft and Meta. Compounding the issue, Nvidia’s GPUs outperform AMD’s in critical AI training tasks, leaving AMD to market its chips as more suitable for AI inference tasks instead.
During AMD’s Q3 earnings call, CEO Lisa Su remained optimistic about the company’s AI future, highlighting the upcoming MI350-series silicon set for a 2025 release. “Our next-gen MI350-series silicon is looking very good and is on track to launch in the second half of 2025, with the largest generational increase in AI performance we have ever delivered,” Su assured investors.
The Competitive Outlook
Despite these efforts, AMD faces an uphill battle. Analysts project its 2025 revenue to reach $32.6 billion—an increase of $7 billion—but still short of Nvidia’s forecasted quarterly AI-driven revenue of $33 billion.
As AMD reshapes its workforce and strategy, its ability to capture significant market share in AI and rebound in gaming remains uncertain.
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