Intel Layoffs: Chipmaker To Fire Over 15,000 Employees Amid Cost Cutting Measures
Intel Layoffs: The firm plans to cut its R&D and marketing budgets by billions annually through 2026. Additionally, it will reduce capital expenditures by over 20 per cent this year
Intel Layoffs: The tech firm Intel will be laying off over 15,000 employees in an effort to overcome the losses the company has been experiencing. The chipmaker has revealed plans to reduce its workforce by more than 15 per cent as part of a $10 billion cost-cutting strategy aimed for 2025.
These layoffs will impact over 15,000 positions, according to Intel’s statement to The Verge. With a current workforce of over 125,000, this firing spree could potentially affect up to 19,000 employees.
Intel plans to cut its R&D and marketing budgets by billions annually through 2026. Additionally, it will reduce capital expenditures by over 20 per cent this year, restructure operations to eliminate non-essential activities, and review all ongoing projects and equipment to ensure spending remains in check.
“This is painful news for me to share. I know it will be even more difficult for you to read,” reads a memo by Intel CEO Pat Gelsinger to the staff, as per the report.
The company announced a $1.6 billion loss for Q2 2024, an increase from the $437 million loss reported last quarter. In the press release, CEO Gelsinger acknowledged, “Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones.”
In his memo to employees, Gelsinger noted, “Our revenues have not grown as expected — and we’ve yet to fully benefit from powerful trends, like AI.”
Second-quarter revenue stood at $12.8 billion, a slight decline of just 1 per cent year-on-year. Not all of Intel’s divisions are struggling, despite notable losses in its chipmaking Foundry business, which has incurred $7 billion in operating losses for 2023 and an additional $2.8 billion this quarter due to investments in new factories and extreme ultraviolet (EUV) lithography. Nevertheless, the company’s products themselves remain profitable.
The majority of losses this quarter, as well as last quarter, came from the Foundry division. Meanwhile, sales have remained relatively stable, and the PC and server segments continue to be profitable.
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