Intel has announced that it will lay off over 15,000 employees, which is about 15% of its workforce.
This decision is part of a plan to save $10 billion by 2025 as the company deals with financial difficulties and tries to improve its cost structure.
Financial Losses and Revenue Decline
Intel recently reported a loss of $1.6 billion for the second quarter of 2024, a big jump from the $437 million loss in the previous quarter.
The company’s revenue also fell slightly, from $12.9 billion to $12.8 billion. These financial issues highlight the need for the company to cut costs and improve efficiency.
Strategic Cost Cuts
The layoffs are part of Intel’s plan to reduce costs and become more efficient.
CEO Pat Gelsinger says the company needs to align its expenses with its new operational model to tackle high costs and low profit margins.
Sector Challenges
While Intel’s main products are still making money, the company has lost a lot of money in its Foundry segment, which had $7 billion in operating losses in 2023.
Additionally, Intel has struggled to compete in the AI server chip market against rivals like Nvidia and AMD.
Impact on Employees
The layoffs will come with an “enhanced retirement offering” for eligible employees and a program for voluntary departures.
Most of the job cuts will be completed within the year. This approach aims to ease the impact on workers while achieving the necessary savings.
Previous Layoffs and Stock Impact
This new round of layoffs follows a major reduction in October 2022 that did not achieve the desired results.
After the announcement, Intel’s stock also saw a noticeable drop in after-hours trading.
Conclusion
Intel’s plan to cut over 15,000 jobs is a key part of its effort to handle financial problems and improve efficiency.
As the company works through these changes, the effects on its employees and stock performance will be closely monitored.
Stay tuned to Startup Forte for more updates on Intel and other major industry news.
