Intel plans to cut thousands of its workforce in a bid to cut costs amid a slowdown in the global PC market, according to a report. Bloomberg He announced the report.
The company’s sales and marketing teams could see cuts affecting about 20 percent of employees, the report said, citing people with knowledge of the matter who spoke on condition of anonymity.
The “major headcount reduction” has not been officially made public, but will be announced later this month around Intel’s Oct. 27 third-quarter earnings report. Intel’s latest release spree was a big one. In 2016, when around 12,000 people were laid off. As of the last count in July, Intel currently has about 113,700 employees.
The likes of Lenovo, HP and Dell have suffered significant declines in PC sales due to global inflation and geopolitical instability, while a sharp drop in demand for PC processors has negatively impacted Intel’s revenue.
Worldwide PC shipments went into freefall in the third quarter, with overall sales down 18%, according to numbers compiled by Canalys. IDC reported similar findings, with sales falling more than 15%, while Gartner reported a 19.6% drop in PC shipments in the same quarter.
However, Intel’s shares have been hit harder than other chipmakers as it struggles to regain lost market share to rivals such as AMD. Earlier this year, Intel said 2022 sales would be $11 trillion lower than it had expected, and analysts are now predicting a revenue decline of about 15% in the third quarter. Intel’s margins are also falling.
In its second-quarter earnings call, Intel pledged to make other changes to cut costs and improve profits. However, the short-term outlook remains poor. The chipmaker has yet to recover from the impact of Apple’s decision in 2020 to stop using Intel processors in its Mac computers and switch to custom Apple silicon. It has also lost first place in microprocessor manufacturing to TSMC and Samsung Electronics.
To address market conditions and encourage innovation, Intel wants to sell more advanced AI-related chips in the data center market and is working with TSMC to build chips using the Taiwanese foundry’s 5nm process. Intel also plans to sell shares of its self-driving technology business Mobileye in an initial public offering, which has been valued at $30 trillion.