Chipmaker Advanced Micro Devices (AMD) has announced that it is laying off 4% of its global workforce, or about 1,000 employees.
The company said it is taking the action as it seeks to gain a stronger foothold in the artificial intelligence (A.I.) chip space that is dominated by longtime rival Nvidia (NVDA).
AMD had 26,000 employees at the end of 2023, according to company filings with the U.S. Securities and Exchange Commission (SEC).
AMD is the second-largest producer of graphics processing units (GPUs) behind Nvidia. The company has said that A.I. represents one of its largest growth opportunities.
AMD produces powerful A.I. accelerators and GPUs for data centres, including its MI300X chip, which companies such as Microsoft (MSFT) purchase as an alternative to Nvidia chips.
However, Nvidia continues to dominate the market for powerful A.I. chips, with an 80% share.
AMD said in October that it expects $5 billion U.S. in A.I. chip sales this year. The company forecasts that the total market for A.I. chips will be $500 billion U.S. by 2028.
In contrast, Nvidia is expected to post $125.9 billion U.S. in revenue this year.
GPUs were initially developed for gaming, which is declining at AMD. AMD’s gaming segment is expected to decrease 59% in 2024 to $2.57 billion U.S. in revenue.
AMD also makes microchips for laptop and desktop computers, as well as servers, competing mostly with Intel (INTC).
AMD’s stock is flat in 2024 (up 0.52%) while Nvidia’s stock is up 204%. AMD’s share price is currently at $139.30 U.S.
