- Second best producer of graphics processing unit AMD set to lay off 4% employees globally to improve operational efficiency.
- The layoffs was primarily driven by the need to adjust to changing market conditions and improve operational efficiency.
What happended
AMD announced on Wednesday that it would lay off 4% of its global workforce. According to a U.S. Securities and Exchange Commission filing, AMD employed 26,000 people at the end of the previous year.
After Nvidia, AMD is the second-largest manufacturer of graphics processing units, or GPUs. In October, AMD stated that it anticipates $5 billion in sales of AI chips this year, or around 5% of the $25.7 billion in overall sales that FactSet anticipates for AMD in 2024. Although AMD projects that the entire market for AI chips will reach $500 billion by 2028, Nvidia already outsells it in terms of total sales; FactSet projects that Nvidia will generate $125.9 billion in revenue in 2024.
″As a part of aligning our resources with our largest growth opportunities, we are taking a number of targeted steps that will unfortunately result in reducing our global workforce by approximately 4%,” an AMD representative said in a statement. “We are committed to treating impacted employees with respect and helping them through this transition.”
Also read:Intel’s AI-chip aspirations dim amidst competitive storm
Also read:Infineon warns of weak 2025 as chip demand slows
Why it’s important
AMD’s decision to lay off 4% of its global workforce is primarily driven by the need to adjust to changing market conditions and improve operational efficiency. As the semiconductor industry faces cyclical downturns and lower demand for certain products, particularly in the PC and consumer markets, AMD has to realign its business to remain competitive. The layoffs are part of a broader strategy to optimize costs and streamline operations.
AMD’s leadership may also be responding to broader industry trends, including increased competition, supply chain challenges, and evolving demand in areas like cloud computing and artificial intelligence. The company aims to focus its resources on high-growth areas and long-term strategic goals. By reducing its workforce, AMD can redirect investments into more profitable segments and technology advancements. This move is not unique to AMD, as other tech companies have made similar adjustments in response to changing economic conditions, inflation pressures, and the global semiconductor market’s volatility.
