Advanced Micro Devices (AMD, Financial) has announced a global workforce reduction of 4%, equating to nearly 1,000 employees from its total workforce of 26,000. This move comes unexpectedly as the company focuses on enhancing its presence in the artificial intelligence chip sector to compete with industry leader Nvidia.
An AMD spokesperson stated that the company is aligning its resources with major growth opportunities, and the restructuring will unfortunately impact around 4% of its global staff. The company is committed to supporting affected employees during the transition.
While the specific departments impacted by these layoffs have not been officially disclosed, anonymous sources suggest that positions in sales for consumer and gaming computers may be primarily affected.
AMD remains the second-largest GPU manufacturer worldwide, trailing Nvidia. It continues to develop powerful AI accelerators like the MI300X for data centers, with companies such as Meta and Microsoft adopting these as alternatives to Nvidia's products. Despite these efforts, Nvidia retains a commanding market share of over 80% in the AI chip sector.
This year, AMD's stock has fallen 5%, contrasted with Nvidia's 200% surge, making Nvidia the most valuable publicly traded company globally, with a market cap of $3.6 trillion compared to AMD's $227 billion. While AMD anticipated $5 billion in AI chip sales this year, this is dwarfed by Nvidia's expected $125.9 billion revenue.
Analyst Jon Peddie expressed surprise at the timing of AMD's layoffs, considering the company's decent quarterly performance. He noted that the decision to cut jobs might have been postponed until a more strategic moment.
