AMD has confirmed that 4% of its employees around the world are about to lose their jobs, as the company seeks to focus on its “largest growth opportunities.” The announcement comes just two weeks after AMD announced its third quarter 2024 financial results, which showed that revenue from its gaming division had plummeted by 69% year-on-year. It’s this division that makes custom chips for the PS5 and Xbox, as well as AMD Radeon gaming GPUs for PCs.
While AMD is currently celebrating the success of its new Ryzen 7 9800X3D gaming CPU, which is so popular it’s sold out practically everywhere right now, the picture is less rosy for the company elsewhere. In particular, revenue from its gaming segment sat at just $2,032 million in the nine months up to September 28, 2024, compared to $4,844 million over the same period last year. AMD might make the best gaming CPU right now, but its gaming GPU products are struggling.
In a statement about the upcoming layoffs, reported by CRN, the company is reducing its global workforce by 4% which, given that the most recent headcount in December 2023 put AMD’s employee numbers at 26,000, means over 1,000 staff will be losing their jobs. In its statement, AMD says, “We are committed to treating impacted employees with respect and helping them through this transition.”
AMD says the redundancies, which were first reported by Wccftech, are “a part of aligning our resources with our largest growth opportunities,” by which the company very probably means data centers and AI. AMD’s data center revenue is booming, increasing from $1,598 million in the quarter ending September 30, 2023, to a massive $3,549 million in the same period this year.
That’s over 7x the revenue of the gaming division, and the $1,041 million operating income from data centers absolutely dwarfs the $12 million from the gaming segment. You only need to look at the explosive growth of Nvidia over the last two years to see why AMD wants to focus on grabbing a big slice of the AI and data center pie.
AMD says that the declining revenue from its gaming segment is “primarily due to a decrease in semi-custom revenue,” by which it means the custom chips it makes for game consoles, which feature an AMD Ryzen CPU and Radeon GPU in one chip. That’s no surprise, given that the PS5 and Xbox Series X are getting long in the tooth now, and while AMD has made a new chip for the PS5 Pro, this premium console is extremely unlikely to sell in the same huge numbers as the standard PS5 before it.
AMD makes no reference to sales of its Radeon gaming GPUs in its financial statement, but it’s no secret that its RDNA 3 graphics cards have failed to capture the imagination of gamers compared to the Nvidia competition.
In the latest Steam hardware survey, for example, all the top ten GPUs are made by Nvidia, with the first RDNA 3 GPU on the list, the Radeon RX 7900 XTX only commanding 0.01% of the gamers surveyed at number 54. However, AMD CEO Lisa Su has said that this decline comes as AMD prepares to “transition to our next-gen Radeon GPUs,” with some hope that its next-gen graphics cards will be more competitive.
If you’re looking to build a gaming PC right now, check out our guide to the best graphics card, where we take you through our favorite options from both AMD and Nvidia.
