Redundancies at Nvidia

For the first time in its history Nvidia has announced a significant reduction in staff. 6.5 % of its employees, 650 people, have been made redundant today.

Nvidia is in a difficult position. AMD has come back impressively with its Radeon HD 4800 and 4600 but the reliability problem with its mobile GPUs has also cost Nvidia dear; firstly because of the necessary price cuts and secondly because of the compensation it is having to pay manufacturers, not to mention damage done brand image.

All this comes during a generally difficult financial context and with Nvidia's track record making for high investor expectations, the company has been forced into taking extreme measures. After giving investors reason to expect record yields over the course of successive quarters, Nvidia had put the bar very high. It is therefore reasonable to conclude that this decision isn’t only linked to any resulting financial savings but is also a sign to investors that the company is committed to doing as much as it can to achieve the results it has been aiming for.

The redundancies have been spread through Nvidia divisions round the globe and the company has not sacrificed any of its projects as yet. It is however underlining the fact that it intends to push its high-potential projects, such as Tegra and CUDA, as far and as fast as possible. Nvidia CEO, Jen-Hsun Huang, confirms:

Our action today is difficult, but necessary considering current business realities. Despite our reduction, we will continue to invest in selective high-growth opportunities like our revolutionary CUDA parallel computing technology and our Tegra mobile single-chip computer. We are taking fast action to enhance our competitive position and restore our financial performance. All of us at NVIDIA are determined to emerge from these challenges an even stronger company.