Intel to cut 'thousands of jobs' in bid to reduce costs
Chipmaker giant Intel plans to eliminate "thousands of jobs" to reduce costs and fund an ambitious effort to rebound from an earnings slump and market share losses.
According to Bloomberg, the workforce reduction may be announced as early as this week, according to people familiar with the company’s plans, who asked not to be identified because the information isn’t public.
Intel, which is scheduled to report second-quarter earnings on Thursday, employs around 110,000 people globally, excluding workers at units that are being spun out.
Chief Executive Officer Pat Gelsinger is spending heavily on research and development aimed at improving Intel’s technology and helping it return to prominence in the semiconductor industry.
The company’s once-dominant position eroded under Gelsinger’s predecessors as rivals, such as Advanced Micro Devices have caught up and taken market share.
Intel employs some 4,900 people in Ireland, making it one of the State's largest employers. Opening here in 1989, Intel has bases in Leixlip and Shannon and has invested more than €30bn in Ireland since its establishment 35 years ago, the company said.
Other chipmakers led by Nvidia have sprinted ahead in the development of lucrative semiconductors tailored for demanding artificial intelligence-related tasks. Intel is also coming to grips with uneven demand for chips that run laptops and desktop computers which is its main business.
Gelsinger, betting that Intel can improve its technology, embarked on a plan to build factories to manufacture semiconductors for other chipmakers. Last week, Intel hired Naga Chandrasekaran from Micron Technology as chief global operations officer, putting him in charge of the company’s overall manufacturing efforts.
Intel reduced its workforce by about 5% in 2023 to 124,800 by the end of the year, after announcing job cuts beginning in October 2022. It also has slowed spending in other areas. The company expected those cost reductions would save as much as $10bn (€9.2bn) by 2025.
Despite its size, Intel's Irish base was largely unaffected by last year's cost reduction measures, with just 130 jobs cut as a result.
Analysts project that Intel will report that second-quarter revenue was flat, compared with a year earlier. Growth will pick up modestly in the second half of 2024, and total sales will increase 3% to $55.7bn (€51.3bn) for the full year, according to Wall Street estimates. That would be the first annual revenue increase since 2021.
Speaking to the Irish Examiner, a spokesperson for Intel said reports of layoffs were a rumour, adding it "does not comment on speculation."
Additional reporting from Bloomberg.
