After Intel’s big move to restructure its workforce, AMD has announced job cuts at its organization as well. The AMD layoffs will see the workforce sliced by 4%, a move that should help the company focus its resources on “its largest growth opportunities.”
After the company revealed its Q3 earnings report last month, its share fell by 13%. While its stock price is still 3.9% higher than where it was when the year began, AMD’s performance is still not stable enough for its, and its investors, liking. Reports suggest that AMD’s restructuring efforts are linked to future AI acquisitions but the company has not confirmed this outright.
Image: Pexels
AMD Announces Job Cuts—4% of Its Global Workforce Has Been Axed
Wccftech was among the first portals to report on the AMD layoffs and it primarily gained its insights from employee message boards, where members of the AMD team had gathered to share the news. Some spoke of their own experience while others alluded to other workers confirming the layoffs for them. According to their insights, 4% of the workforce has already been informed of the company’s decision to let them go.
Discussing AMD’s workforce reduction plans, some employees did admit they were provided a generous severance to soften the blow, however, a clear explanation of what the severance package included has not been revealed.
As per a filing with the U.S. Securities and Exchange Commission (SEC) at the end of last year, the company had around 26,000 employees under its wing. This means that 4% of job cuts at AMD would affect 1,000 employees. This is much better than the 15,000 workers who are being laid off at Intel, but regardless of the scale, the impact on the individual worker remains the same.
AMD Layoffs Linked to a Focus on AI
With Nvidia taking the world by storm, AMD has had to prioritize catching up to its competitors quickly. The company is believed to be in pursuit of opportunities for expansion within the AI industry, and it is doing so by exploring beneficial acquisitions and its lineup of accelerator products. To find the funds for the AI investments, the company has to figure out a viable strategy for cash and debt financing. This AI focus has been connected to AMD’s decision to proceed with the layoffs.
AMD’s third-quarter revenue results showed a 17% year-over-year growth in revenue and a 34% increase in profits, however, its fourth-quarter outlook did not live up to expectations. Its embedded chip revenue has declined by 25% and the 69% dip in revenue in the company’s gaming division has also been particularly worrying.
″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%,” a representative for AMD said in a statement.
As AMD moves forward with the job cuts, it will have to be prepared to make more real-time changes to its strategy beyond a reduction in its workforce, if it hopes to catch up with some of its top competitors and avoid the fate that some others are tackling right now.
