Intel has announced its intention to reduce its workforce by 15%, amounting to approximately 15,000 jobs, confirming earlier forecasts regarding potential layoffs.
This decision comes on the heels of an unsatisfactory performance in the second quarter and is part of a comprehensive initiative aimed at achieving $10 billion in cost reductions by the year 2025.
In a letter addressed to staff, Intel’s CEO Pat Gelsinger emphasized the critical need for realigning the company’s expenditure with its updated operational strategy.
Intel Announces Significant Redundancies
“Our revenue growth has fallen short of projections… Our expenses are excessively high, while our profit margins remain unacceptably low,” stated Gelsinger. He further indicated that “more decisive actions” were necessary to navigate challenges stemming from an anticipated tougher latter half of the year and the fact that Intel has yet to capitalize on trends relating to artificial intelligence.
Since 2020, although Intel expanded its workforce by roughly 10%, it has faced a staggering decline in annual revenues totaling $24 billion. The company’s latest financial report indicated a minimal decline of 1% year-over-year revenue due to pressure on gross margins tied to its AI-driven personal computer offerings.
In terms of figures, Intel’s revenue during the quarter ending June 29 reached $12.8 billion. Gelsinger remarked: ”Our financial results for Q2 were underwhelming despite meeting essential product and manufacturing technology milestones.”
CFO David Zinsner added: “Through cost-cutting measures, we are proactively enhancing our profitability and fortifying our financial standing.”
Apart from employee layoffs, Intel plans to introduce a voluntary separation program along with improved retirement benefits for qualifying individuals.
TechRadar Pro is seeking further details about how support will be provided for those impacted workers.
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