Chip giant Intel to lay off 15,000 employees, reduce spending by $10 bn

San Francisco, Aug 2 (SocialNews.XYZ) Chip-maker Intel has announced to lay off more than 15 per cent of its workforce — or about 15,000 employees — after posting a poor quarterly earnings and dismal outlook.

According to the company, the layoffs and other measures will reduce spending by $10 billion in 2025.

“This is a tough day for all of us and there will be more tough days ahead. But as difficult as all of this is, we are making the changes necessary to build on our progress and usher in a new era of growth,” said Intel CEO Pat Gelsinger in a memo to employees.

"We plan to deliver $10 billion in cost savings in 2025, and this includes reducing our headcount by roughly 15,000 roles, or 15 per cent of our workforce. The majority of these actions will be completed by the end of this year,” he informed.

Next week, the company announce a retirement offering for eligible employees and broadly offer an application programme for voluntary departures.

Admitting that revenues have not grown as expected, he said “we’ve yet to fully benefit from powerful trends, like AI”.

“Our costs are too high, our margins are too low. We need bolder actions to address both, particularly given our financial results and outlook for the second half of 2024, which is tougher than previously expected,” the Intel CEO added.

The company reported a 1 per cent decline in revenues for the second quarter against the same period last year.

Gelsinger told employees that annual revenue in 2020 was about $24 billion higher than it was last year, yet “our current workforce is actually 10 per cent larger now than it was then”.

The company will take several actions to make Intel a leaner, simpler and more agile company, like reducing operational costs, simplifying its portfolio, eliminating complexity, reducing capital and other costs and suspending dividend.

Source: IANS