AMD announces major layoffs as AI becomes main focus

• Chipmaking giant AMD is laying off 1,000 of its 26,000 workers
• The company wants to focus on artificial intelligence and data centers
• Data center revenue accounted for 51% of AMD’s entire revenue last quarter

AMD has confirmed it will be laying off around 1,000 workers, or 4% of its headcount, as it looks to shift its internal focus towards AI.

The chipmaker believes that by losing the 1,000 workers, it will be able to focus more on areas of its business with significant growth potential, such as AI servers and data center hardware.

“As 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 company spokesperson said in a statement. "We are committed to treating impacted employees with respect and helping them through this transition.”

AMD to lay off 1,000 workers

Given its strong financial performance last quarter, the change it seen more as a strategic shift rather than a reaction to financial worries, unlike key rival Intel.

AMD had doubled its headcount in recent years to tackle the surge in demand for high-performance processors used in AI data centers, however its revenue has only climbed 23%. Although recent figures suggest growth is strong, it’s likely that the company overestimated its human resource requirements, hence the adjustment.

Two weeks ago, AMD confirmed a third-quarter revenue of $6.82 billion, up 18% year-over-year and up 17% compared with the previous quarter. It also boasted of a record data center segment revenue, up 122% year-over-year and 25% quarter-over-quarter to $3.5 billion, or more than half (51%) of its entire revenue.

Despite strong figures, AMD’s market cap has fluctuated over the past year with several peaks and troughs. Share prices are up 16.2% in 12 months, compared with a 194.5% rise in Nvidia share prices during the same period. Intel shares are down 36.8%.

In the most recent quarterly report, AMD CEO Dr Lisa Su said: “Looking forward, we see significant growth opportunities across our data center, client and embedded businesses driven by the insatiable demand for more compute.”

AMD isn’t the only company making adjustments to staffing – a few months ago, Intel confirmed it would be laying off 15,000 workers, or 15% of its headcount, in relation to poor financial performance.

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