AMD's Decline in Revenue For Consecutive Quarters Becomes a Primary Reason Behind Massive Layoffs

The expected layoff figure is around 450 employees, with a significant portion of it coming from the "Radeon Technologies Group" or RTG, responsible for the consumer GPU segment. While the source hasn't disclosed a specific reason behind the upcoming "layer" of wave-offs, it is being associated with the continuous decline in revenue for Team Red in all divisions, as well as in profit margins, which have been reduced to an "alarming" 97% compared to the previous year.

It is being reported that AMD Shanghai, which is the company's main division, has approximately 3,000 employees working at its R&D center, where the layoffs are anticipated. If the affected employees reach the 450 mark, that accounts for a major portion of getting laid off, which is something to worry about for the industry as a whole. Since AMD's decision may be targeted towards its Radeon GPU portfolio, it can be said that Team Red isn't doing good in the markets, mainly because of the fierce competition it faces from the likes of NVIDIA and Chinese startups like Moore Threads and BirenTech.

To further worsen the situation in mainland China, the US administration is implementing trade policies to restrict several AI GPUs from NVIDIA and AMD from being exported to the country & that's something that is also a cause of concern for NVIDIA.

With the AI demand substituting for consumer graphics, the decision does make sense in a way that shows that AMD might divert its attention toward catering to the AI markets, as said by the company's CEO Lisa Su multiple times. Details about the particular layoff implementation are slim, but the wise move here would be to shift the workforce to the company's AI resources, in order to prevent a situation of "uncertainty" for the affected employees. However, the consecutive YoY decline in revenue targets will force AMD to make such decisions.

AMD is yet to "consolidate" its position in the AI markets, and in consumer graphics, the situation is completely against Team Red since NVIDIA and its Hopper/Ada offerings are dominating the markets. Moreover, the company is also facing a "brain drain" at a much larger scale, which has fueled the development of tech startups like Bitmain Technologies, TianShu ZhiXin, and plenty more.

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