Intel Corp., one of the world’s largest chipmakers, is facing a new wave of layoffs after rumors that the company is slashing budget for its data center and client computing business units. approved. Earlier this year, Intel announced sweeping pay cuts that saw senior executives and employees lose bonuses and pay cuts as part of the company’s efforts to cut costs during a historic downturn in the semiconductor industry that has seen both designers and Both chip manufacturers have been affected, to reduce.
| Intel posted the biggest quarterly loss in its history |
The possibility of a 20% reduction in the workforce at Intel
Now, the Santa Clara, Calif.-based tech giant shared in a statement sent to Tom’s Hardware that it is undergoing “functional-specific workforce reductions.” Intel’s earnings report for the first quarter of 2023 was one of the worst in the company’s history. Its revenue fell 36 percent year over year, and the company also posted a loss of 4 cents per share. The losses came as the company paid $1.5 billion in dividends out of its own pocket during the first quarter to keep shareholders happy, keeping payouts roughly in line with the year-ago quarter.
Rumors of layoffs at Intel started last week when Dylan Patel of Semianalysis tweeted about it and shared:
Very sad news, but massive layoffs are coming at Intel! Intel’s Datacenter and Client computing groups will receive about a 10 percent budget cut.
However, at the time, he was the only source to mention the new business strategy, and so it was unclear if the layoff would actually take place. Now Intel itself has confirmed this after asking Tom’s Hardware to comment on the rumours. The layoffs are part of the company’s latest effort to reclaim the chipmaking crown from Taiwan Semiconductor Manufacturing Corp. (TSMC) and build more factories in the United States. A risky move that has now put Intel in a difficult financial situation during the recession.
Intel’s statement sent to this publication is as follows:
“Intel is working to accelerate its strategy while navigating a challenging macroeconomic environment. We are focused on identifying {ways} to reduce costs and increase productivity through multiple initiatives, including certain job and workforce reductions in various areas of the company.
We continue to invest in core areas of our business, including our US-based manufacturing operations, to ensure we are well positioned for long-term growth. These are difficult decisions and we are committed to treating affected employees with dignity and respect. “
The news follows pay cuts in February that saw Intel suspend merit bonuses and cut salaries by 25%. The largest percentage went to the company’s chief executive, Mr. Patrick Gelsinger, and employees in grades 7-11 saw a 5 percent pay cut, rising to 10 percent for vice presidents and 15 percent for senior managers. At the same time, quarterly and annual bonuses were also suspended and pension plan payments were halved.
The company’s woes in the chip industry have hit Intel hard, with the company’s latest market cap at $129 billion, even lower than smaller rival Advanced Micro Devices, Inc. But on the other hand, AMD’s stock market value is $145 billion, and most analysts expect the company to continue gaining data center market share this year, making it an attractive destination for Intel layoffs. took
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