The state of the world economy has become a soft-target, an easy excuse, for several companies in pessimism, or simply in a wilt, to plan and execute large-scale layoffs, better termed workforce reductions. S3 Graphics, a company that once showed signs of growth post acquisition by VIA with the introduction of entry-level, yet current-generation graphics accelerators, has reduced its United States workforce by as much as 25%. While the figure appears to be a large number of jobs, it counts in hundreds, which still includes a sizable amount of S3 Graphics employees across various divisions of the company, including some sections of the parent company.

As expected the most likely cause is the company's reaction to the global economic slowdown, with depleting market-share and profitability. While normally companies look to sustain operations post such workforce reductions in pursuit of growth, in the case of S3 Graphics, this instead puts the development of the company's next-generation graphics processor (GPU) in uncertainty, as portions of the engineering departments weren't immune to the reductions either. Currently, S3 Graphics with its Chrome 500 series graphics accelerators are eying its share of the entry-level discrete graphics market, with its products designed for HD entertainment, GPGPU and 3D acceleration. The graphics technologies of S3 have been in use by its parent company for years, with its chipset products. S3's next-generation graphics processor is expected to incorporate newer manufacturing technologies from Taiwan-based foundry companies.