AMD, the second-largest producer of graphics processing units (GPUs), is laying off approximately 4% of its global staff as it seeks to strengthen its presence in the growing artificial intelligence chip space dominated by Nvidia. The move comes as AMD aims to capitalize on emerging opportunities in AI, where the company expects $5 billion in sales this year.
The layoffs will affect around 1,040 employees, according to AMD’s statement. The company has committed to treating impacted employees with respect and helping them through the transition.
AMD’s decision to focus on AI is part of its effort to adapt to changing market trends. While gaming remains a significant sector for the company, revenue is expected to decline by 59% in 2024. In contrast, server CPU sales rose nearly 3% year-over-year in the third quarter.
The AI chip market is projected to reach $500 billion by 2028, with AMD aiming to capture a larger share. The company’s AI accelerator products, such as the MI300X, are gaining traction among companies like Meta and Microsoft. However, Nvidia still dominates the market with over 80% market share, partly due to its core software development.
Despite this, AMD’s stock price has underperformed compared to Nvidia’s, with a 5% decline in 2024 vs. a 200% increase for Nvidia shares.
Source: https://www.cnbc.com/2024/11/13/amd-layoffs-company-to-4percent-of-workforce-or-about-1000-employees-.html