Analysts call Intel’s disappointing quarter an ‘historic collapse’ and 'much worse than feared'
CNBCMAR 14 2023
Intel, "yet to fully benefit from powerful trends, like AI," Thursday announced laying off over 15% of its staff — 15K employees — to cut spending by $10B in 2025.
Most of the sacking will be done by end-2024. CEO Pat Gelsinger also hinted at massive restructuring of the firm which faced $1.6B in second-quarter losses.
While sales remained relatively stable and its PC and server segments profitable, the losses reportedly arose mostly from Intel's chipmaking Foundry.
Intel's layoff plan is undoubtedly painful, but that will save the company $10 billion by next year. This is necessary to recalibrate Intel's course for the future. The chipmaker remains committed and focused on innovation and AI. Such streamlining was a long time coming and will ensure it continues to lead the technology sector.
Intel is grappling with declining revenues and profits amid the rise of companies like Nvidia in the AI chip market. It plans to pivot towards developing a foundry business to produce chips for other companies, but this strategy requires massive investments. Laying off thousands of employees alone may not be enough to turn Intel’s fortunes around.