AMD’s financial results for the third quarter didn’t look bad compared to how Intel has been (not) doing lately. It is therefore unexpected that after Intel, which announced big cuts in August to save up to 10 billion in costs, AMD is also proceeding with layoffs. This could mean unpleasant steps like canceling products or even completely leaving certain areas of the market, but it is not yet clear which areas this might affect.
AMD confirmed on Tuesday that it is laying off a relatively large number of employees, it should be about 1,000 people. If you look at the total number of employees of the company, it is a layoff smaller than that carried out by Intel in absolute numbers and in percentage. During the growth in recent years and especially the acquisition of Xilinx, the number of employees is now around 26,000 (figure at the end of last year) and, according to the official statement, layoffs concern 4%. On the other hand, the layoffs at Intel announced in August are to reduce the number of employees by up to 15%.
Information about the layoffs, for example, appeared on the Layoff website and was reported by WCCFtech. On this, AMD explicitly confirmed the news. The company does not cite any specific negative impulse that should lead to the layoffs, although it is possible that in the eyes of investors the company’s profits are not big enough (stocks fell after the announcement of the latest results, although this is not an unusual thing).
AMD says the firm is taking “targeted steps” to “align the firm’s resources with its greatest business opportunities.” Unfortunately, the layoffs are to be a consequence of these changes, according to the company. It looks like AMD is going to reduce investments in some activities that are less profitable and lay off employees working on them in favor of currently successful areas (mainly AI accelerators, we assume).
Are some products about to end?
It is therefore possible that some AMD products or projects may be discontinued or restricted. The field of Radeon graphics cards probably comes to mind, where the company has a permanent problem of capturing a significant share and sales against the dominant market position of Nvidia. The entire Gaming segment has lost a lot of revenue in recent quarters, as sales of console chips have also dropped significantly. In theory, it is also possible that the layoffs will concern the teams responsible for chips for consoles – either because these orders have low margins, or because AMD has lost (or expects to lose) contracts for next-generation consoles.
But it is also possible that the most visible products for us (graphics cards and Radeon GPUs and processors) will not be affected by this cutting of investments and layoffs, and instead will be thrown out especially among the people who came with the acquisition of Xilinx and other companies. In recent years, AMD has also bought the manufacturer of SmartNICs and DPU Pensando, the manufacturer of data center hardware ZT Systems and some startups dealing with artificial intelligence (Mipsology, Nod.ai and Silo AI). After repeated acquisitions, various redundancies and workplaces redundant from the company’s point of view could probably arise.
Layoffs can be a little bit of everything even across the company. What impact this will have on the company’s technologies and products is still hard to guess.
The company states that it intends to deal with the dismissed employees with respect and help them with the situation (probably in the form of severance pay and the like – here it must be remembered that in the USA there are much more lax conditions for dismissal and finding yourself on the pavement can be very hard a process associated, among other things, with the immediate loss of health insurance).
Resources: CRN, techPowerUp, WCCFtech
Source: www.cnews.cz
