Intel layoff: US chipmaker to cut 18,000 jobs, reduce $20 billion in expenses
Chipmaker Intel Corp. is cutting 15% of its massive workforce — about 15,000 jobs — as it tries to turn its business around to compete with more successful rivals like Nvidia and AMD.
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FollowUS chipmaker Intel said on Thursday that it will reduce staff by over 15% in order to optimise operations. The decision to reduce spending by almost $20 billion this year was made after Intel revealed that its most recent quarter had resulted in a $1.6 billion deficit. In an earnings statement, Intel CEO Pat Gelsinger stated, "Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones." He added, "Second-half trends are more challenging than we previously expected."
Chief financial officer David Zinsner stated that "headwinds" to the ramp-up of Intel's artificial intelligence PC product and underutilised capacity at its facilities had a negative impact on second quarter profitability. "By implementing our spending reductions, we are taking proactive steps to improve our profits and strengthen our balance sheet," Zinsner stated.
With 124,800 workers at the end of the previous year, Intel may be facing layoffs in around 18,000 roles. Intel declared in June that it was stopping the growth of a significant industrial project in Israel that would have added an additional $15 billion to the cost of a chip facility.
Intel said at the time that "managing large-scale projects, especially in our industry, often involves adapting to changing timelines." The US-based corporation continued, "Decisions are based on business conditions, market dynamics, and responsible capital management."
The belt-tightening came just a month after Intel struck a defiant tone in the face of strong challenges from rivals Nvidia, AMD and Qualcomm, unveiling technologies it said would lead the artificial intelligence revolution. Intel has controlled the market for semiconductors that power everything from laptops to data centres for decades. However, its rivals, particularly Nvidia, have surpassed it in recent years in terms of specialised AI processors.
AI computers are expected to be 80 percent of the PC market by 2028, Intel said, citing the Boston Consulting Group.
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