Intel to Lay Off 15K Employees, Cut $10B in Costs
Intel to Lay Off 15K Employees, Cut $10B in Costs
The Facts
Pat Gelsinger, chief executive officer of Intel, announced on Thursday that the US chipmaking giant is laying off 15% of its staff — or about 15K employees — by year-end to reduce costs in 2025.
In a memo to employees, Gelsinger said that the company — which is "yet to fully benefit from powerful trends, like AI" — aims to save $10B by next year as it required a massive restructuring after posting $1.6B losses in Q2 this year.
The Spin
Intel's layoff plan is undoubtedly painful, but that will save the company $10B by next year. This is necessary to recalibrate Intel's course for the future and protect employment at the company as a whole. The chipmaker remains committed and focused on innovation and AI. Such streamlining wasis 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 investmentsinvestment. Laying off thousands of employees alone may not be enough to turn Intel's fortunes around.