AMD Hit With Layoffs

Posted by By our-little-miss-is-home November 14, 2024 38 Views 5 Min Read
AMD Hit With Layoffs



Key Takeaways

  • AMD is laying off 4 percent of its workforce.
  • The job cuts are reportedly the result of the company pursuing what it thinks will offer the most opportunity for future growth.
  • This is likely a reference to AI, with the company’s competitor Nvidia seeing massive success in the AI space over the past year.



AMD has announced that it is laying off 4 percent of its workforce. The semiconductor giant produces processors and graphics cards for gaming PCs and consoles like Xbox and PlayStation, but the chip market has shifted toward AI in recent years. Now, AMD is leaning into that trend as its gaming division struggles to maintain the sales it used to see.

Along with Nvidia, AMD is one of two major chip companies dominating the gaming sector. It’s had no shortage of notable product releases in the past year, and in October, AMD announced a new line of CPUs mere weeks after unveiling the baseline Ryzen 9000 series. Despite this activity, it seems the chipmaker’s sales aren’t what they used to be, leading it to cut a significant portion of its workforce as it rethinks its priorities.


Microsoft Announces Additional Layoffs

Related
Microsoft Announces Additional Layoffs to Its Gaming Division

Activision Blizzard parent company Microsoft announces another round of layoffs impacting its Xbox gaming division following previous cuts in January.

In a statement to CNBC, an unnamed AMD representative described their reasoning behind the layoffs, explaining that they’re the result of the company pursuing what it thinks will offer the most opportunity for future growth. Roughly 1,000 workers could lose their jobs as a result, and while the chipmaker didn’t specify which teams will see the biggest cuts, its latest earnings call suggests the gaming division may be in danger. While AMD has offered massive price cuts on CPUs and is still a household name in GPUs, its gaming tech sales are expected to fall by 59 percent by the end of 2024.


AI Shift Causes Layoffs at AMD


The “largest growth opportunities” AMD mentioned likely refer to the AI industry. Pivoting to focus on AI is part of why the company’s main competitor, Nvidia, has seen such massive success lately. Nvidia unveiled a range of AI GPUs earlier in 2024, and, according to CNBC, accounts for over 80 percent of the AI chip market. That leaves a lot of ground for AMD to cover, especially when its gaming hardware isn’t selling enough to make up for it falling behind in the AI space.

While the company has fallen behind Nvidia in this new frontier, AMD has also leaned further and further into AI. Some of its latest processors come with a dedicated AI engine, and many of its newer GPUs feature some AI functionality. More recently, AMD said its FSR4 technology could be fully AI-based, which could challenge Nvidia’s ever-popular DLSS upscaling tech. If this recent announcement is anything to go by, though, these efforts haven’t been enough to push the company ahead in the new GPU market.


AMD’s spokesperson has said the company is committed to treating all impacted employees with respect as the layoff process continues. What exactly that means for these workers is unclear, as is how the chipmaker will direct its resources or manage its gaming division after the job cuts.

Source link