Advanced Micro Devices (AMD), the semiconductor giant, has announced the layoff of 4% of its global workforce, equivalent to about 1,000 employees. According to the company, this move is part of a strategy to realign its resources toward areas with greater growth potential, such as artificial intelligence (AI) and data center hardware.
A Strategic, Not Financial Decision
The cuts are not due to economic problems. In fact, AMD has reported strong performance in the third quarter of 2024, with revenues of $6.819 billion, representing an 18% year-over-year increase and a 17% growth compared to the previous quarter. According to Lisa Su, CEO of AMD, “we see significant growth opportunities driven by the insatiable demand for more computing power.”
This strategy also reflects an adjustment in human resource forecasting. Although AMD doubled its workforce in recent years to meet the growing demand for high-performance processors, its revenues only increased by 23% during the same period, suggesting an overestimation of its labor needs.
Record Numbers in Data Centers
One of the highlights from AMD’s quarterly results is the record achieved by its data center division, which generated revenues of $3.5 billion. This represents a 122% year-over-year growth and constitutes more than half of the company’s total revenues.
Additionally, sales of EPYC™ processors and Instinct™ accelerators have been the primary drivers of this growth. These technologies are designed to handle complex workloads, from cloud computing to advanced AI applications.
Pushing Towards AI
AMD is also ramping up its investment in artificial intelligence solutions, a market in which it seeks to compete more directly with companies like Nvidia. During the Advancing AI 2024 event, AMD unveiled new products, such as the EPYC 9005 processors and Instinct MI325X accelerators, optimized for advanced AI tasks.
Moreover, the company is collaborating with major tech players, such as Google Cloud, Microsoft, and Oracle, to deploy these solutions in enterprise and cloud environments.
The Impact on the Job Market
While the layoffs represent a loss for some of its team members, AMD has emphasized its commitment to supporting affected employees during this transition. This move also aligns with a broader trend in the tech industry, where companies like Intel have made similar adjustments to their workforces.
Looking to the Future
With a renewed focus on AI and data centers, AMD expects to continue consolidating its position in the market. The company is projecting revenues of up to $7.5 billion in the fourth quarter of 2024, which would represent a 22% year-over-year growth.
In an increasingly competitive sector, AMD’s ability to adapt to market demands could be key to maintaining its leadership and continuing to deliver technological innovations.