Although AMD is prospering, CEO Lise Su is laying off four percent of its global workforce. The move is part of a strategy to increase competitiveness with Nvidia.
AMD is laying off four percent of its workforce. About a thousand employees must look for another job. That’s what Reuters knows. The layoffs are notable because AMD has been riding a good course in recent years. The manufacturer is gaining market share in almost all markets and has a superior product with its Epyc server chips.
The layoffs are part of a restructuring in which AMD wants to focus more on its key growth markets. That does not include the gaming market, but it does include the data center sector. AMD not only wants to score in the data center with Epyc, but would also like to fire up Nvidia with its Instict AI chips.
Mass Production
The advanced AMD Instinct MI325X is AMD’s biggest weapon in the battle for AI market share. The company wants to scale up its production, but that is not a given. Factories capable of baking the world’s most advanced chips are rare. Production capacity, in other words, is scarce and expensive. In that context, AMD seemingly wants to shift budget from wages in less essential departments to investment in AI chip production.
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On top of that, AMD’s share price is not commensurate with the company’s success. AMD lost three percent market capitalization this year. That that value is driven by unrealistic expectations along the side of investors is not a factor.