AMD was hit by layoffs

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Important takeaways

  • AMD is laying off 4 percent of its workforce.
  • The cuts are reportedly the result of the company pursuing what it believes will offer the greatest opportunity for future growth.
  • This is likely a reference to AI, with the company's competitor Nvidia seeing huge advances in the AI ​​space over the past year.



AMD has announced that it is laying off 4 percent of its workforce. The semiconductor giant produces processors and graphics cards for gaming computers and consoles such as Xbox and PlayStation, but the chip market has shifted towards AI in recent years. Now AMD is bucking that trend as its gaming division struggles to maintain the sales it used to see.

Along with Nvidia, AMD is one of two major chip companies that dominate the gaming sector. It's had no shortage of notable product releases over the past year, and in October AMD announced a new line of processors just weeks after unveiling the base line Ryzen 9000 series. Despite this activity, it appears the chipmaker's sales aren't what they used to be, prompting it to cut a significant portion of its workforce as it reevaluates its priorities.


Microsoft announces more layoffs

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Microsoft announces further layoffs for its gaming division

Activision Blizzard's parent company Microsoft is announcing another round of layoffs affecting its Xbox games division after earlier cuts in January.

In a statement to CNBC, an unnamed AMD representative outlined its reasoning behind the layoffs, explaining that they are the result of the company pursuing what it believes will offer the greatest opportunity for future growth. About 1,000 workers could lose their jobs as a result, and while the chipmaker didn't specify which teams will see the biggest cuts, its latest earnings call suggests the gaming division could be at risk. While AMD has offered massive price cuts on CPUs and remains a household name in GPUs, its gaming technology sales are expected to decline by 59 percent by the end of 2024.


AI Shift Causes Layoffs at AMD


The “biggest growth opportunities” mentioned by AMD likely refer to the AI ​​industry. Focusing on AI is part of why the company's main competitor, Nvidia, has seen so much success lately. Nvidia unveiled a range of AI GPUs earlier in 2024, and accounts for over 80 percent of the AI ​​chip market, according to CNBC. That leaves a lot of ground for AMD to cover, especially when its gaming hardware isn't selling enough to make up for falling behind in the AI ​​space.

While the company has fallen behind Nvidia in this new frontier, AMD has also been leaning further and further into AI. Some of its latest processors come with a dedicated AI engine, and many of its newer GPUs have some AI features. More recently, AMD said that its FSR4 technology could be fully AI-based, which could challenge Nvidia's ever-popular DLSS upscaling technology. If this recent announcement is anything to go by, however, those efforts haven't been enough to propel the company forward in the new GPU market.


AMD's spokesperson has said the company is committed to treating all affected employees with respect as the layoff process continues. Exactly what that means for those workers is unclear, as is how the chipmaker will manage its resources or manage its gaming division after the cuts.

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