Intel Corp. is preparing to cut thousands of jobs to reduce costs and finance a significant effort to recover from declining earnings and market share losses.
According to sources familiar with the matter who requested anonymity, the announcement of these layoffs could happen as soon as this week because the information is not yet public.
Intel, which employs about 110,000 people, excluding workers from units being spun off, is set to report its second-quarter earnings on Thursday.
Under Chief Executive Officer Pat Gelsinger, Intel is investing heavily in research and development to enhance Intel’s technology and restore its leadership in the semiconductor industry.
Under previous leadership, Intel’s dominant position weakened, allowing competitors like AMD to catch up and capture market share. An Intel spokesperson declined to comment on the job cuts.
Following the news, Intel shares saw a slight increase of about 1 percent, reaching $31.11 in late trading.
Other companies, notably NVIDIA Corp., have surged ahead in creating high-demand semiconductors designed for artificial intelligence tasks. Meanwhile, Intel needs more demand for its primary products, laptops and desktop computer chips.
Gelsinger has initiated a plan to build factories that will produce semiconductors for other chipmakers to improve Intel’s technological capabilities.
As part of this effort, Intel recently hired Naga Chandrasekaran from Micron Technology Inc. as the chief global operations officer, overseeing the company’s manufacturing operations.
Intel’s workforce reduction is not unprecedented. The company reduced its headcount by about 5 percent in 2023, bringing the total to 124,800 by the end of the year, following job cuts that began in October 2022. Additionally, Intel has slowed spending in other areas, aiming to achieve cost savings of up to $10 billion by 2025.
Analysts predict that Intel’s second-quarter revenue will be flat compared to last year’s period. However, they anticipate modest growth in the latter half of 2024, with total sales expected to increase by 3 percent to $55.7 billion for the entire year. If these projections hold, it would mark Intel’s first annual revenue increase since 2021.
