AMD Axes 4 Percent Of Staff, Amid AI Chip Focus

AMD has confirmed plans to cut approximately four percent of its global workforce, as it increases its focus on the AI chip sector.

Reuters received a confirmation from AMD that it will axe four percent of staff, which equates to 1,000 employees out of a total workforce of approximately 26,000.

What makes the announcement surprising is AMD recently released its third-quarter financial results, which saw profits rise 158 percent to $771m, on the back on sales that rose 18 percent to $6.8 billion.

AMD layoffs

Those results also revealed that revenues for AMD’s data centre segment, which houses its AI graphics processors, jumped more than two-fold in the most recent quarter.

AMD’s personal computer segment grew 29 percent, but sales in its gaming unit slumped about 69 percent during the period.

Despite the strong set of financial results, AMD said it is carrying out the layoffs, so it can focus on key growth areas: namely AI and the enterprise markets.

“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 percent,” an AMD spokesperson told Reuters on Tuesday.

“We are committed to treating impacted employees with respect and helping them through this transition,” the spokesperson added.

AMD is already the second-biggest AI chip supplier after Nvidia, but has had difficulties capitalising on increased demand due to production constraints at contract chip maker TSMC (constraints which have also affected Nvidia).

Despite this, AMD has achieved some notable wins. For example ChatGPT developer OpenAI has begun using AMD AI chips alongside Nvidia GPUs via its Microsoft Azure cloud infrastructure.

Rival Intel

It should also be noted that the AMD job losses are nowhere near the scale of job loss at troubled rival chip maker Intel.

In August Intel had shocked the world when it revealed disappointing second quarter financial results, which highlighted the scale of the challenge still facing the firm in its long running turnaround plan.

At the time Intel CEO Pat Gelsinger also confirmed that the chip giant would be cutting 15 percent of its 116,500 strong workforce (roughly 15,000 jobs), after admitting that “costs are too high, our margins are too low”.

Those 15,000 layoffs came on top of the 5 percent job losses in 2023, as well as a previous round of job cuts in October 2022.

Gelsinger also added to gloomy outlook when he discussed the ongoing struggle to turn around Intel’s fortunes, which involve creating a foundry business, but also carrying on with heavy investments in new plants and R&D.

In September Gelsinger confirmed that Intel plans “to establish Intel Foundry as an independent subsidiary inside of Intel.”

Intel also confirmed it would pause development of two planned chip factories in Germany and Poland.

That development was a setback for Germany’s economy, which has been battling recession for two years.