According to informed sources, Intel plans to lay off thousands of employees to reduce costs and provide funding for its recovery plan. Currently, Intel is facing the dilemma of declining profits and market share.
According to sources familiar with the company's layoff plan, the plan could be announced as early as this week. The company currently has approximately 110000 employees, not including some employees from separate departments that have been spun off.
In addition, Intel is scheduled to release its second quarter financial report on Thursday, August 1st.
Intel is undergoing a transformation
Prior to 2021, Intel's dominant position in the chip market had been eroded, and competitors such as AMD had caught up and seized a portion of the market share.
After taking office in February 2021, Intel's current CEO Pat Gelsinger began investing heavily in research and development aimed at improving Intel's technology and helping it regain dominance in the semiconductor industry.
While other chip manufacturers, led by NVIDIA, are already tailoring profitable semiconductor products for AI related tasks, Intel is still struggling to cope with the fluctuating demand for its main business laptop and desktop computer chips.
Regarding this, Gelsinger believed that Intel could improve its technology, so he began a plan to build a chip foundry, aiming to not only produce and sell its own chips, but also manufacture semiconductors for other chip manufacturers.
Last week, Intel also hired Naga Chandrasekaran, a senior executive at Micron Technologies, as its global Chief Operating Officer, responsible for the company's overall manufacturing operations.
A large amount of capital investment is also accompanied by a certain degree of cost reduction plan. After Intel announced the start of layoffs in October 2022, the company subsequently laid off about 5% of its workforce in 2023, leaving 124800 employees by the end of last year. In addition, Intel has also slowed down spending in other areas. It is expected that these cost reductions will save up to $10 billion by 2025.
After the latest news of layoffs came out, Intel's stock price rose about 1% after hours, reaching a high of $31.11.
For Intel's upcoming second quarter results, analysts expect its quarterly revenue to remain the same as the same period last year. According to Wall Street estimates, growth will moderately rebound in the second half of 2024, with total annual sales increasing by 3% to $55.7 billion, marking the first annual revenue growth since 2021.