Chipmaker AMD joined other tech companies to fire employees as the company pivots towards serving the AI market.
AMD will cut its workforce by about 4% to align resources with “maximum growth opportunities,” the company said in a statement. The layoffs have reached around 1,000 workers as AMD reported it had 26,000 employees late last year.
AMD's “growth opportunities” are undoubtedly in AI. Datacenter instinct AI accelerators and AI PCS Ryzen processors rose 18% year-on-year for the quarter ending September 28th.
“Record revenue led by EPYC sales growth provided strong third quarter financial results [CPUs] In a statement, AMD CEO Lisa Su said there is a robust demand for instinct data center products and Ryzen PC processors.
To maintain that momentum, AMD must adopt a workforce that can pivote critically from legacy technology into AI products and develop them, said Victor Janulaitis, CEO of labor market research firm Janco Associates.
“AI is at the forefront of all new initiatives for businesses, and AMD is not keeping up to the market,” Janulaitis said. “They need to adjust.”
AMD's AI strategy goes beyond changing workforce. In August, the company announced plans to spend $4.9 billion to acquire ZT System, the designer and manufacturer of AI and cloud computing systems for hyperscale data centers. AMD is expected to close trading in the first half of next year.
Nevertheless, the company's success depends on hiring and retaining AI talent for product development, experts said. In its latest 10-Q filing with the U.S. Securities and Exchange Commission, AMD described the competition for those familiar with AI and machine learning as “fierce.”
The number of AI-related graduates is on the rise, but it is not enough to meet today's demand. From 2010 to 2022, the number of graduates increased at an annual rate of 5%, according to the Center for Security and Emerging Technology.
“AI workers are not available immediately,” Janulaitis said.
According to industry trade group Comptia, around 10% of today's high-tech job ads are aimed at workers with AI skills starting from 6% two years ago.
In addition to AMD, other companies have fired workers to pursue people with AI skills. The AI-driven workforce change has contributed to nearly 147,000 layoffs in the technology industry recorded this year by site layoffs. FYI.
In August, Cisco reported plans to cut more than 6,300 jobs or 7% of its workforce as part of a restructuring of its business in the fastest markets of AI, cybersecurity and the cloud.
AMD's rival Intel is an example of a missed out on the red-hot AI market. In August, Intel reported that it would cut its workforce by 15% or more than 15,000 jobs by the end of the year. It also plans to cut capital expenditures by $10 billion in 2025.
According to industry experts, the majority of Intel's problems stems from the lack of competitive AI products for data center AMD and market leader Nvidia.
Antone Gonsalves is the editor of the TechTarget Editorial and reports on industry trends that are important for enterprise tech buyers. He has worked in high-tech journalism for 25 years and is based in San Francisco. Any news tips? Send him an email.
