Intel is making significant efforts to reduce costs, including a plan to reduce its workforce by at least 15 percent. This could mean laying off over 15,000 employees, resulting in an estimated cost savings of around $10 billion by 2025. The company, which currently has a workforce of at least 125,000, estimates that the headcount reduction could impact up to 19,000 employees.
In addition to the layoffs, Intel is also planning to cut spending in research and development, as well as marketing, by billions annually for the next two years. The company will reduce capital expenses by 20 percent this year, discontinue “non-essential” work, and review ongoing projects and existing equipment to eliminate unnecessary expenditure.
This downsizing was announced to employees via an internal memo from Pat Gelsinger, CEO of Intel. The company reported losses of about $1.6 billion in the second quarter of 2024, significantly higher than the $437 million loss in the previous quarter, due to lower than expected revenue growth. However, Intel’s PC and server sales remain strong and profitable, despite losses in its chipmaking Foundry division.
The success of Intel’s upcoming AI laptop chip, Lunar Lake, will be crucial in determining the company’s future profits.
