Intel to Cut Thousands of Jobs to Fund Recovery
- tech360.tv
- Jul 31, 2024
- 2 min read
Intel intends to slash thousands of jobs to fund the recovery and solve market share issues. CEO Pat Gelsinger is spearheading a comprehensive makeover to strengthen Intel's competitive position. The cost-cutting plan intends to save US$3 billion in 2023 while reducing the workforce to 124,800 by the end of the year.
The chipmaker, which is set to release its quarterly results on Thursday, saw its shares jump by about 1% in after-hours trade. However, the stock has fallen by 40% since the start of the year.
When contacted by Reuters for comment on the report, Intel declined to react. Despite enduring problems, the US chipmaker maintains a strong position in the personal computer and server markets. Nonetheless, it has struggled to supply the growing demand for semiconductors used in AI applications.
CEO Pat Gelsinger has launched a strategic transition to re-establish Intel's competitive position. This includes boosting production capacities, investing in cutting-edge chip technologies, and expanding into new markets.
Intel presented a cost-cutting strategy based on "people actions" in October 2022, with the goal of reducing yearly costs by $3 billion by 2023. According to regulatory documents, the chipmaker plans to cut its headcount to 124,800 by the end of 2023, down from 131,900 the previous year. According to the company's February statement last year, the plan is expected to result in annual cost reductions ranging from $8 billion to $10 billion by 2025.
According to LSEG data, analysts expect Intel's second-quarter sales to be similar to the previous year, with a 23% fall in the data centre and AI segments. Traditionally known for designing and manufacturing its own chips, Intel has been actively moving into the foundry sector, producing chips for other companies.
Investors anticipate a government push by the Biden administration to boost semiconductor manufacturing in North America. This initiative attempts to diversify supply chains and lessen reliance on Taiwan, which could improve Intel's future prospects.
Intel plans to cut thousands of jobs to finance recovery and address market share challenges.
CEO Pat Gelsinger is leading a strategic overhaul to enhance Intel's competitive position.
The cost-reduction plan aims to save US$3 billion in 2023 and reduce the workforce to 124,800 by the end of the year.
Source: REUTERS
