American semiconductor company AMD recently announced that it will cut approximately 4% of its global workforce, with the expected number of layoffs being under 1,000. This move comes as AMD continues to outperform Intel in the x86 processor market, but faces intense competition from industry giant Nvidia in its transition from graphics processing units (GPUs) to artificial intelligence (AI) accelerators.
An AMD spokesperson stated, "To align our resources with our greatest growth opportunities, we are taking some targeted steps, and unfortunately, this will result in a global workforce reduction of about 4%." The company has committed to treating affected employees with respect and providing support during the transition.
According to documents AMD submitted to the U.S. Securities and Exchange Commission last year, the company had about 26,000 employees at that time. AMD now only indicates that the number of layoffs will be below 1,000. Although AMD predicts that AI chip sales will reach $5 billion this year, its overall revenue target is $25.7 billion, indicating that challenges remain in this area.
While AMD holds a significant position in the processor and GPU market for gaming consoles, its growth has been somewhat constrained due to the underperformance of new generation products, particularly the supply shortages of PlayStation 5 and Xbox Series X/S affected by the pandemic.
According to a report by Mercury Research, AMD's share of the processor market compared to Intel has reached 34%, a significant increase from the past. However, analyst Jon Peddie expressed surprise at the layoffs. In a message to GamesBeat, he mentioned, "AMD's recent quarterly performance has been good, although it did not meet some Wall Street analysts' expectations. But in terms of employee numbers, AMD does not seem overly crowded, making the timing of the layoffs quite unfortunate."
In summary, AMD has had to implement layoffs in the current competitive market environment to adjust its resources and focus on more promising growth areas.
Key Points:
💼 AMD will lay off about 4%, with the expected number under 1,000.
📉 Although AMD performs well in the processor market, it faces strong competition in the AI chip sector.
💡 Analysts are surprised by the layoffs, believing the timing is not ideal.