Intel has acknowledged intentions to lay off 15% of its staff, or around 15,000 people, confirming earlier estimates.
The decision comes after a dismal second quarter and is part of a larger goal to save $10 billion in costs by 2025.
Intel CEO Pat Gelsinger announced the news in a letter to staff, emphasising the urgent need to align the company’s cost structure with its new operating model.
Newsng gathered that Intel is not only reducing its personnel; the corporation has stated that it would slash R&D and marketing spending by billions of dollars each year through 2026 in order to save expenses and meet the $10 billion objective.
This year alone, the corporation expects to lower capital expenditures by more than 20%. “Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate,” according to the statement.
“Our costs are too high, our margins are too low,” and explained why the workforce reduction is necessary. He noted that Intel’s annual revenue in 2020 was about $24 billion higher than the previous year, yet the workforce has grown by 10% since then.
He acknowledged the difficulty of the decision, stating: “This is painful news for me to share. I know it will be even more difficult for you to read. This is a tough day for Intel as we are making some of the most consequential changes.
Experts stated that there are a lot of things at play here, but it hasn’t helped that businesses like Apple and Microsoft are moving away from Intel in favour of processors made in-house or by Qualcomm.
Gelsinger stated: “These decisions have challenged me to my core, and this is the hardest thing I’ve done in my career. My pledge to you is that we will prioritize a culture of honesty, transparency and respect in the weeks and months to come.”
We earlier reported that US chip giant, Intel, unveiled technologies it claimed would lead the artificial intelligence revolution, striking a defiant tone in the face of fierce competition from competitors Nvidia, AMD, and Qualcomm.
