Intel to Reduce Workforce by 18,000 and Slash $20 Billion in Costs
Intel Corp., the U.S. semiconductor giant, announced on Thursday that it will reduce its workforce by approximately 15 percent, amounting to 18,000 job cuts, and slash $20 billion in expenses this year. This move comes as the company faces significant financial challenges, including a recent quarterly loss of $1.6 billion.
Intel Corp., the U.S. semiconductor giant, announced on Thursday that it will reduce its workforce by approximately 15 percent, amounting to 18,000 job cuts, and slash $20 billion in expenses this year. This move comes as the company faces significant financial challenges, including a recent quarterly loss of $1.6 billion.
In a statement, Intel CEO Pat Gelsinger acknowledged the company’s disappointing second-quarter performance, despite achieving key product and technology milestones. “Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones,” Gelsinger said. “Second-half trends are more challenging than we previously expected.”
The company’s Chief Financial Officer, David Zinsner, attributed the poor earnings to difficulties ramping up its artificial intelligence PC product and unused capacity at its facilities. Zinsner emphasized that the layoffs and expense cuts are proactive measures to bolster Intel’s profitability and strengthen its financial stability.
At the end of 2023, Intel reported having 124,800 employees, suggesting that the upcoming layoffs could impact about 18,000 positions. The company is also halting the expansion of a major chip factory project in Israel, which was initially set to involve a $15 billion investment.
In addition to these cuts, Intel is facing intensified competition from rivals such as Nvidia, AMD, and Qualcomm, which have gained traction with specialized AI processors. Despite the challenges, Intel has continued to invest in innovation, unveiling new technologies at Taiwan’s Computex expo. Gelsinger introduced the Xeon 6 processors for servers and shared details about the upcoming Lunar Lake chips designed for AI PCs.
Gelsinger underscored Intel’s commitment to advancing AI technology, describing it as a transformative era for the industry. “AI is driving one of the most consequential eras of innovation the industry has ever seen,” he said. “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.”
This restructuring plan comes at a time when tech giants, including Microsoft, are integrating AI capabilities directly into their products, further intensifying the competitive landscape. Microsoft, for example, has introduced its Copilot+ AI PCs, which will feature AI enhancements built into the Windows operating system.
Sources By Agencies
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