Although AMD is doing well, CEO Lise Su is laying off four percent of the global workforce. The move is part of a strategy intended to strengthen its competitive position against Nvidia.

AMD is laying off four percent of its workforce. Around a thousand employees have to look for another job. Reuters knows this. The layoffs are noticeable because AMD has been on the right track in recent years. The manufacturer is gaining market share in almost all markets and has a superior product with the Epyc server chips.

The layoffs are part of a restructuring that will see AMD focus more on its key growth markets. The gaming market is not included, but the data center sector is. AMD not only wants to score points with Epyc in the data center, but also wants to challenge Nvidia with its Instict AI chips.

Mass production

The advanced AMD Instinct MI325X is AMD’s greatest weapon in the battle for AI market share. The company wants to increase production, but that is not a given. Factories capable of producing the world’s most advanced chips are rare. In other words: production capacity is scarce and expensive. In this context, AMD apparently wants to shift its budget from salaries in less important departments to investing in the production of AI chips.

Additionally, AMD’s stock price is not proportional to the company’s success. AMD lost three percent of its market value this year. The fact that this value is determined by investors’ unrealistic expectations is irrelevant.