Intel to Slash Thousands of Jobs Amid PC Sales Slump: Report
Intel is planning to cut thousands of jobs in an attempt to slash costs as the Silicon Valley veteran’s revenues drop and global demand for PCs and PC components continues to taper — reports Bloomberg.
According to sources, Intel will announce the layoffs as early as this month. The tech giant will start letting people go around the same time as its third-quarter earnings report, which is due on October 27, the people said.
As of July, Intel had a total of 113,700 employees on staff. Some areas of the company, such as the sales and marketing division, could shrink by up to 20% as a result.
Intel (and the tech industry as a whole) saw sales surge during the COVID-19 era, to the point that the demand for PCs, computing components, and consumer electronics far exceeded the supply.
However, consumer demand has since taken a steep fall. Sales continue to decline despite an ongoing global chip shortage, which CEO Pat Gelsinger believes will drag into 2024.
Back in July, Intel warned that 2022 sales would be about $11 billion lower than previous projections. Market analysts believe the company’s Q3 revenue could drop by about 15%.
Intel’s once-prosperous margins are also shrinking as the company sees increased competition from rivals like AMD and tries to get itself out of an innovation lull that it admittedly fell into during its years as top dog.
During its second-quarter earnings call, Intel confessed it could take steps to boost profits. “We are also lowering core expenses in calendar year 2022 and will look to take additional actions in the second half of the year,” Gelsinger said at the time.
According to Bloomberg Intelligence analyst Mandeep Singh, the planned job cuts could possibly decrease Intel’s fixed costs, which are estimated to range from at least $25 billion to $30 billion, by about 10% to 15%.
Like Meta, Google, and many others in the tech space, Intel froze hiring earlier this year as market conditions worsened and economic uncertainty grew. The tech giant also announced price hikes of up to 20% across its product portfolio.
Intel recently unveiled 13th Gen Raptor Lake, its latest line of consumer CPUs.