Advanced Micro Devices (AMD) announced plans to reduce
its global workforce by approximately 4%, equating to nearly 1,000 employees.
On November 13, 2024, Advanced Micro Devices (AMD) announced plans to reduce its global workforce by approximately 4%, equating to nearly 1,000 employees. In many minds, It amounts to an announcement by the company that AI eliminates jobs. But this strategic move aims to reallocate resources toward high-growth areas, particularly in artificial intelligence (AI) chip development, as AMD intensifies its competition with industry leader Nvidia.
The decision follows AMD’s recent financial disclosures, which revealed a mixed performance across its business segments. The data center unit experienced a significant revenue increase, more than doubling in the September quarter, driven by robust demand for AI graphics processors. Conversely, the gaming division faced a substantial 69% decline in sales during the same period. To capitalize on the burgeoning AI market, AMD plans to mass-produce its MI325X AI chip in the fourth quarter despite the increased research and development expenses.
In response to the layoff announcement, AMD’s stock declined, closing at $140.66, down 2.1% on Wednesday. This downturn contributes to a year-to-date decrease of approximately 4.54%, contrasting with the S&P 500’s 26% gain over the same period.
Looking ahead to Thursday’s market session, investors are likely to closely monitor AMD’s stock performance, assessing the potential long-term benefits of the company’s strategic focus on AI against the immediate impact of workforce reductions. The broader semiconductor sector may also experience heightened volatility as market participants evaluate the implications of AMD’s restructuring on industry dynamics and competitive positioning.