Intel says it will reduce spending by $20 billion
and lay off 18,000 employees.
2/8/2024,
With 124,800 workers at the end of the previous year, Intel may be facing layoffs in roughly 18,000 roles.
San Francisco
US chipmaker Intel announced on Thursday that it will reduce staff by over 15% to optimise operations.
Intel disclosed that it had incurred a $1.6 billion deficit in the most recent quarter, prompting the decision to cut spending by over $20 billion this year.
“Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones,” said Intel CEO Pat Gelsinger in an earnings release.
“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 hurt second-quarter profitability.
A $15 billion chip facility would have cost an additional $15 billion if Intel had not announced in June that it was scaling back a major industrial project in Israel.
Intel said at the time that “handling large-scale initiatives, particularly in our business, frequently requires timeline adaptation.
“Decision-making is based on responsible capital management, market dynamics, and business conditions,” the American company went on.
Intel made cuts less than a month after revealing innovations it said would drive the artificial intelligence revolution. This was a hazardous move, given how intensely Nvidia, AMD, and Qualcomm compete with it.
For many years, Intel has dominated the semiconductor market, powering everything from laptops to data centres. In recent years, meanwhile, its competitors Nvidia in particular have outperformed it in terms of specialised AI processors.
In addition to introducing Intel’s most recent Xeon 6 server CPUs, Gelsinger provided additional information regarding the company’s upcoming Lunar Lake chips for AI PCs during a keynote address at Computex in Taiwan.
“AI is driving one of the most consequential eras of innovation the industry has ever seen,” Gelsinger stated.
“The magic of silicon is once again enabling exponential advancements in computing that will push the boundaries of human potential and power the global economy for years to come.”
According to Gelsinger, Intel’s most recent hardware offers the finest possible balance of price, energy efficiency, and performance.
His lecture came after the previous keynote addresses by Cristiano Amon of Qualcomm, Lisa Su, the CEO of AMD, and Jensen Huang of Nvidia. These speeches were full of accusations and denials on whose company’s AI-focused products were the finest.
Microsoft revealed its Copilot+ AI PCs in June; these computers would come with Windows OS with artificial intelligence characteristics integrated in.
In addition to Microsoft, several of the largest computer makers in the world, such as Dell, HP, Samsung, and Lenovo, will also be adding components that will enable AI capabilities on the device itself, rather than just through the internet.
According to Intel, which referenced the Boston Consulting Group, AI computers are predicted to account for 80% of the PC market by 2028.
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