Jensen Huang, Nvidia CEO, assured employees that, despite the “significantly lower-than-expected” second-quarter earnings, there would not be any layoffs shortly. Instead, the CEO promised to give employees a raise to combat global inflation.
Nvidia released a preliminary report earlier this week predicting that its total revenue will fall by nearly $1.4 billion from its $8.1 billion target for the second quarter. Nvidia noted that its gaming business was severely underperforming as its revenue dropped 44% year-over-year.
Business Insider obtained a portion of an email from Huang, Nvidia CEO: “What does that mean for us?” Will we lay off employees? No. Instead, we will give you a raise to take care of your family, as all of you are facing extremely high inflationary pressures.
Huang stated that Nvidia would find and eliminate any waste of time, processes or materials and make improvements. This is your chance to make Nvidia more efficient, faster, and agile.
This was done to reduce costs and improve efficiency. The company stock price has fallen more than 8 per cent since Monday’s report. However, Nvidia’s last quarter was not all bad, as it saw huge gains in its Data Center, Automotive, and Software businesses.
It is not clear how or when these raises will be implemented. The email stated that future layoffs are not in doubt, but there were no immediate layoffs.
Huang concluded that Nvidia should invest in areas such as the Metaverse or AI to support future growth. These areas require serious computing power and should give Nvidia’s Grace superchip a chance.
Nvidia declined comments to confirm the authenticity of the email.
Nvidia isn’t the only tech giant experiencing difficulties. Meta reported that Nvidia suffered its first revenue decline in over a decade. Intel, however, is struggling to make ends meet with its billions which aren’t as large as they used to be.
