After Intel, AMD now goes for mass layoffs, fires 4% of all global employees to focus on AI

In a strategic shift towards AI, AMD has announced plans to cut 4 per cent of its global workforce. The layoffs, confirmed by the company, are part of a broader effort to capitalise on emerging growth opportunities in artificial intelligence.

With around 26,000 employees as of last year, this reduction translates to roughly 1,000 jobs lost, according to a report by TechCrunch. The move comes after Intel a legacy rival for AMD was forced to cut 15000 jobs earlier this year.

AMD is facing mounting pressure to catch up with its rival NVIDIA in the AI chip market. AMD explained the rationale while speaking to CRN, stating that the company is realigning its resources to target its biggest growth prospects. They added that the company is committed to treating affected employees with respect and providing support during the transition.

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The news follows a mixed Q3 earnings report. While AMD did see revenue and profit growth, there were significant setbacks.

The company’s gaming division suffered a dramatic 69 per cent decline in year-over-year performance, and the guidance for the upcoming quarter fell short of Wall Street’s expectations.

AMD’s struggles in the AI space are apparent. Despite shipping an estimated 224,000 GPUs this year, it hasn’t been enough to keep up with demand from major clients like Microsoft and Meta. NVIDIA, meanwhile, continues to dominate the market, largely because its chips are preferred for key AI training workloads. Although AMD has promoted its technology as superior for AI inference, it’s still playing catch-up.

During the Q3 earnings call, CEO Lisa Su sought to reassure investors, expressing optimism about AMD’s future AI chip lineup. She highlighted the upcoming MI350-series, slated for launch in the latter half of 2025, as a potential game-changer with a significant boost in AI performance. However, it’s a challenging road ahead.

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Even with the anticipated performance enhancements, AMD’s projected revenues for 2025 are expected to climb to $32.6 billion, a modest increase compared to NVIDIA’s AI-driven quarterly revenue forecast of $33 billion.

The focus on AI is critical for AMD, but its path to compete with NVIDIA remains steep. Despite attempts to gain ground, AMD’s stock is down about 4 per cent this year, reflecting investor concerns over the company’s ability to keep pace in the lucrative AI chip market. As the tech landscape continues to shift, AMD’s gamble on AI could either propel it forward or leave it further behind.