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According to a spokesperson, chip designer Advanced Micro Devices, Inc., is laying off a portion of its global workforce. AMD confirmed the development after several anonymous posts on online message boards. AMD, which is currently aggressively targeting the artificial intelligence industry through multiple acquisitions as well as exiting accelerator products, plans to finance its acquisitions through a mix of debt and cash.
As per the details shared online and later confirmed by the firm, the layoffs amount to roughly 4% of AMD's workforce. They surprised several posters on the chat boards, with others confirming that they had heard similar news. AMD's layoffs follow multiple job cuts at the firm's larger rival, Intel Corporation. Unlike AMD, Intel has struggled to retain profitability and has posted losses in two of its latest quarters.
AMD Stock Down 2.7% On Day Of Layoffs At Firm
The rumors of layoffs at AMD come after a mixed third-quarter earnings report, which started a bearish wave for the shares. Since AMD released its third-quarter earnings, the stock has been down by 13.6%. While the firm grew its revenue and profit by 17% and 34%, respectively, during the third quarter, its midpoint revenue guidance of $7.5 billion for the current quarter missed analyst estimates of $7.54 billion.
AMD's earnings report also shared a sharp drop in the firm's gaming division. During the quarter, gaming revenue dropped by a stunning 69% annually to $462 million. The drop led to the division's operating income nearly turning into a loss, marking a 96% drop to $12 million from the year-ago quarter's $208 million. AMD attributed the gaming GPU revenue drop primarily to "lower semi-custom revenue."
Now, it appears that AMD's mixed-bag performance during Q3 is translating into layoffs. According to the firm and reports on internet chat boards, it is laying off employees. Several posts claim that 1,000 employees, or 4% of AMD's workforce of roughly 26,000, are being let go.
According to a post on the message board Team Blind, 4% of AMD's employees were laid as part of worldwide layoffs today. The original poster saw several replies to their posts, most confirming the redundancies. One user commented that their friend had confirmed the 1,000 number, with another confirming that they were laid off as well.
Another post on the message board, The Layoff, also mentioned the redundancies. In response to the original poster's statement sharing that they were "affected by the layoff," four anonymous users shared that either they or someone they knew were affected. One user commented that while they were not expecting to be laid off, they got what they "consider to be a generous severance, which softens the blow."
Another commented that they "just found out" and were in "total shock." According to them, "Supposedly the decision was made “way up high” beyond my managers hands but it still feels personal." Two others shared that people they had worked with had been let go by AMD.
In a statement given to Wccftech, an AMD spokesperson confirmed the layoffs. According to AMD, the layoffs are "a part of aligning our resources with our largest growth opportunities." They are part of "a number of targeted steps that will unfortunately result in reducing our global workforce by approximately 4%." AMD added that it is "committed to treating impacted employees with respect and helping them through this transition."
