Chip giant also wields the layoff knife! AMD will lay off 4% of its global workforce, affecting about 1,000 employees
AMD announced a global layoff of 4%, affecting approximately 1,000 employees. The company stated that this move is aimed at aligning resources with the greatest growth opportunities. AMD is seeking a stronger foothold in the artificial intelligence chip sector, although its market share still lags behind NVIDIA. It is expected that AMD's sales of artificial intelligence chips will reach $5 billion in 2024
According to the Zhitong Finance APP, the veteran computer chip manufacturer AMD (AMD.US) announced on Wednesday that it will lay off 4% of its global workforce. According to a filing with the U.S. Securities and Exchange Commission (SEC), AMD had 26,000 employees at the end of last year, and this will affect about 1,000 employees. A representative from AMD stated in a statement, "As part of aligning our resources with the greatest growth opportunities, we are taking some targeted steps, unfortunately, these steps will result in a global layoff of approximately 4%. The company is committed to treating the affected employees with respect and will assist them through the transition."
AMD is the second-largest graphics processor manufacturer after NVIDIA and has been seeking a stronger foothold in the rapidly growing artificial intelligence chip sector dominated by NVIDIA. The company stated that artificial intelligence is one of its biggest growth opportunities. AMD's stock has fallen 5% in 2024, while NVIDIA's stock has surged 200%, making it the largest publicly traded company by market capitalization.
AMD produces powerful AI accelerators for data centers, with companies like Meta (META.US) and Microsoft (MSFT.US) purchasing the MI300X accelerators as alternatives to NVIDIA systems. However, NVIDIA still dominates the robust AI chip market, holding over 80% market share, partly due to developing core software for AI engineers to create programs like ChatGPT.
In October, AMD stated that it expects AI chip sales to reach $5 billion this year, about one-fifth of FactSet's estimate of AMD's total sales reaching $25.7 billion in 2024. AMD believes that the total market size for AI chips will reach $500 billion by 2028, but its current total sales pale in comparison to NVIDIA. FactSet estimates that NVIDIA's revenue will reach $125.9 billion in 2024.
GPUs were originally developed for gaming, and AMD has lagged in this area. According to FactSet, AMD's gaming business revenue is expected to decline by 59% in 2024, to $2.57 billion.
AMD also produces processor chips for laptops, desktops, and servers, primarily competing with Intel. According to Mercury Research, Intel's share of server CPU sales increased nearly 3% year-over-year in the third quarter to 34%