Intel plans to lay off thousands of employees in the coming weeks, U.S.-based news outlet Bloomberg reported on Wednesday. The move is part of a broad efficiency plan aimed at reducing costs and funding efforts to return the company to a growth trajectory.
According to sources close to the company, the announcement of the layoffs is expected as early as this week. Intel currently employs approximately 110,000 workers worldwide.
This isn’t the first time the tech giant has cut down its workforce. In 2023, the company reduced its staff by about 5%. The company estimated its efficiency measures will save up to $10 billion by 2025.
Intel CEO Patrick Gelsinger led significant investments in research and development to improve Intel’s technology and restore its leading position in the chip industry. In recent years, Intel’s status has eroded under the leadership of Gelsinger's predecessors, as competitors like AMD have managed to close gaps and capture significant market share.
Another challenge facing Intel is the rapid advancement of companies like Nvidia in developing advanced chips tailored for tasks related to artificial intelligence (AI). The field has become one of the most profitable in the industry in recent years. Simultaneously, Intel is dealing with unstable demand for chips designed for laptops and desktops, which remain the core of the company’s business.
As part of the new strategy, Gelsinger plans to turn Intel into a chip manufacturer for other companies. Last week, the company hired Micron Technology’s Naga Chandrasekaran as global operations manager, aiming to improve the company's manufacturing capabilities.
Analysts predict that Intel will report revenues similar to those of the previous year in its Q2 2024 financial reports set to be published soon. However, they expect moderate growth in the second half of the year, with total revenues for 2024 increasing by 3% to $55.7 billion. If this forecast comes to pass, it will mark the first year since 2021 that Intel records an annual revenue increase.
Despite the challenges, Intel’s management expressed cautious optimism about the future. The company hopes its investments in research and development, along with its upcoming efficiency measures, will allow it to resume growing and maintain its status as one of the leading companies in the global chip industry.