Summary
AMDhas announced that it is laying off 4 percent of its workforce. The semiconductor giant produces processors and graphics cards for gaming PCs and consoles like Xbox and PlayStation, but the chip market has shifted toward AI in recent years. Now,AMDis leaning into 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 dominating the gaming sector. It’s had no shortage of notable product releases in the past year, and in October,AMD announced a new line of CPUsmere weeks after unveiling the baseline Ryzen 9000 series. Despite this activity, it seems the chipmaker’s sales aren’t what they used to be, leading it to cut a significant portion of its workforce as it rethinks its priorities.
In a statement to CNBC, an unnamedAMD representative described their reasoning behind the layoffs, explaining that they’re the result of the company pursuing what it thinks will offer the most opportunity for future growth. Roughly 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 may be in danger. WhileAMD has offered massive price cuts on CPUsand is still a household name in GPUs, its gaming tech sales are expected to fall by 59 percent by the end of 2024.
AI Shift Causes Layoffs at AMD
The “largest growth opportunities” AMD mentioned likely refer to the AI industry. Pivoting to focus on AI is part of why the company’s main competitor, Nvidia, has seen such massive success lately.Nvidia unveiled a range of AI GPUsearlier in 2024, and, according to CNBC, accounts for over 80 percent of the AI chip market. That leaves a lot of ground for AMD to cover, especially when its gaming hardware isn’t selling enough to make up for it falling behind in the AI space.
While the company has fallen behind Nvidia in this new frontier, AMD has also leaned further and further into AI. Some of its latest processors come with a dedicated AI engine, and many of its newer GPUs feature some AI functionality. More recently,AMD said its FSR4 technology could be fully AI-based, which could challenge Nvidia’s ever-popular DLSS upscaling tech. If this recent announcement is anything to go by, though, these efforts haven’t been enough to push the company ahead in the new GPU market.
AMD’s spokesperson has said the company is committed to treating all impacted employees with respect as the layoff process continues. What exactly that means for these workers is unclear, as is how the chipmaker will direct its resources or manage its gaming division after the job cuts.
AMD Ryzen 9 9900X
The Ryzen 9 9900X from AMD is a high-performing desktop CPU that is based on the Zen 5 architecture and boasts better efficiency and higher clock speeds compared to its previous generation counterpart. The 9900X brings 12 cores and 24 threads along with a boost clock speed of 5.6 GHz. It can deliver better performacne than the 7900X at a lower TDP of 120W.
