AMD Cuts 4% of Global Workforce As Competition Grows In AI Chip Market

Semiconductor giant Advanced Micro Devices (AMD) has started a strategic workforce reduction, which is likely to affect around 1,000 of its employees globally, representing 4 per cent of its total workforce, says a report by TechCrunch. The company says this decision as part of a broader strategy to realign its resources with primary growth opportunities in the semiconductor market.

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Competition From Nvidia

The workforce reduction comes amid AMD's ongoing challenges in the artificial intelligence (AI) chip sector, where the company faces fierce competition from market leader Nvidia. While AMD has maintained growth in certain segments, its position in the AI chip market remains challenging, particularly in matching Nvidia's capabilities in AI training workloads.

AMD's Performance Overview

AMD's financial performance paints a mixed picture:

• PC segment saw 29 per cent growth
• Gaming division saw 69 per cent year-over-year decline
• Stock performance witnessed 3.9 per cent increase year-to-date
• 13 per cent drop following Q4 forecast disappointment

The contrast between AMD and Nvidia's market performance is vast; Nvidia saw nearly 200 per cent stock price increase in 2024 while AMD's stock price decline 5 per cent in the same period.

Future Outlook Of The Industry

The restructuring reflects broader industry dynamics as semiconductor companies adjust their strategies in response to market demands and competitive pressures. AMD's focus on resource optimisation indicates a strategic move to strengthen its position in key growth areas.