AMD has laid off 4% of its global workforce in a realignment that is likely to be driven by the pursuit of all these AI dollars

AMD has confirmed plans to layoff 4% of its global workforce. AMD's workforce was estimated at 26,000 in 2023, so the firings are likely to affect around 1,000 AMD employees.

AMD has not revealed the exact reason for its decision. According to WCCFTech posts on AMD-themed message forums including Team Blind started to appear, reporting job loss from several teams.

AMD was contacted about the reports, and confirmed that 4% were being laid off. The company claimed that the layoffs are due to "aligning resources with our biggest growth opportunities."

If we look at it from a purely logical perspective, AI is the biggest and most obvious "opportunity". The implication is that AMD has realigned resources to launch a more concerted attack on Nvidia’s dominance of the datacenter GPU market.

AMD explained that this move was part "of a number of targeted measures that unfortunately will result in a reduction of our global workforce of approximately 4%." AMD said it was "committed to treat impacted employees with respect, and help them through this transition."

The specifics are not clear. We don't yet know if AMD has laid off a large number of people or if the cuts have been spread more evenly.

Gaming is a clear candidate for cutbacks. AMD's gaming division - which includes PC graphics, custom chips for consoles such as Xbox and PS5 - accounted for just 6.8% of AMD’s total revenues at the last count. It is also shrinking rapidly. Gaming does not seem to be one of AMD's biggest growth opportunities.

Oddly, this news comes just two weeks after AMD reported record revenues, boosted in part by the company's nascent AI graphics card sales. AMD's share has actually fallen in value since that announcement. This is largely due to the fact that it was made alongside less optimistic guidance for the fourth quarter of 2024.

AMD's share prices are down 15% as I write this. They went from a recent high of $166 on Oct 29 to $140 today, a steep drop.

Intel has AMD beaten when it comes down to layoffs. Intel announced plans to layoff no less than 15,000 workers in August. Intel started with a much larger employee base. This amounted to about 15% of the workforce. Still a significant chunk, but not as much as 15,000 AMD's 26,000 strong workforce would indicate.

Layoffs are always bad news for the people directly affected, even when they are necessary. Let's hope AMD doesn't have to let any more employees go and that the "realignment' achieves the company aims.