Intel recently announced plans to lay off about 15 percent of its workforce, amounting to approximately 15,000 employees. These job cuts are a result of unused manufacturing capacity and charges linked to the launch of the company’s AI PCs. While Intel framed this move as part of its long-term transformation strategy, the impact is significant. The company aims to trim down its R&D, marketing, and overall spending to $20 billion in 2024, $17.5 billion in 2025, and even lower in 2026. Most of the layoffs are expected to take place by the end of the year.
The company’s CEO, Pat Gelsinger, expressed disappointment with Intel’s financial performance in the second quarter, despite achieving key product and technology milestones. Gelsinger acknowledged that the second half of the year presents more challenges than anticipated, prompting Intel to take decisive actions to enhance operational and capital efficiencies while accelerating its transformation efforts.
Intel is close to completing its plan to progress through five manufacturing nodes in four years, prompting a shift towards capital efficiency. This shift will result in a 20 percent reduction in gross capital expenditures in 2024. While Intel’s product roadmap remains unchanged for now, more details will be shared during an upcoming conference call.
In a memo to employees, Gelsinger described the layoff news as “painful” to share. The company plans to hold a company-wide conference call to provide further details following the earnings call. Gelsinger emphasized the goal of simplifying Intel’s product portfolio by eliminating complexity and focusing on more impactful projects.
Despite recent issues with its 13th-gen Core chips attributed to voltage problems, Intel is gearing up to launch its next-gen Core Ultra chip, Lunar Lake, at the IFA show in early September. The company remains committed to its technological advancements and product development efforts.
Mark, a seasoned technology journalist with decades of experience, has been covering the tech industry for various publications, including PCWorld. His extensive knowledge and expertise in PC microprocessors, peripherals, and operating systems have earned him recognition in the field. With a vast portfolio of articles and a history of breaking news stories, Mark continues to be a prominent figure in tech journalism.
