The number of employees at Intel will be drastically cut, probably by thousands. In conjunction with the release of its third-quarter results report, the corporation intends to make the change. In July, the chip manufacturer employed 113,700 workers. About 20% of the workforce may be reduced from several areas, including Intel’s sales and marketing team.
Intel’s primary business, PC CPUs, is seeing a sharp fall in demand, and it has battled to regain market dominance. The business issued a warning in July, estimating that sales in 2022 would be around $11 billion less than anticipated. A 15% decline in sales is what analysts are projecting for the third quarter. And Intel’s once-vibrant profit margins have shrunk.
In 2016, Intel cut 12,000 positions, or 11% of its overall workforce, in a large round of layoffs. Since then, the corporation has reduced costs slightly and shut down a number of departments, including its drone and cellular modem operations. When market circumstances deteriorated and worries about a recession increased earlier this year, Intel put a freeze on recruiting.
The PC, data centre, and artificial intelligence divisions of Intel are battling a decline in technology expenditure. Brian Gelsinger, the company’s CEO, has been striving to rehabilitate the organization’s status as a Silicon Valley classic. The most recent budget cuts are probably intended to lower Intel’s fixed expenses by 10% to 15%.
Intel’s PC sales tumbled 15% in the third quarter from a year earlier, according to IDC. The company lobbied heavily for a $52 billion chip-stimulus bill this year. With PC prices stagnating and demand weakening, Intel may need to pursue a dividend cut.
Intel has been trying to regain its footing in the industry by releasing new PC processors and graphics semiconductors. A key part of its strategy is selling more chips to the data-center market, where rivals AMD and Nvidia have made inroads. The company’s shares have fallen more than 50% in 2022, with a 20% plunge occurring in the last month alone.
Indicating impending job layoffs, Intel anticipates restructuring expenses in the third quarter. Nvidia and Micron Technology Inc. are two chipmakers who have stated they are delaying layoffs for the time being. A number of IT firms, including Oracle Corp. and Arm Ltd., have already begun to lay off employees.
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