Heaptalk, Jakarta — Intel is reportedly cutting more than 15% of its staff, roughly 15,000 roles, expected to be completed by the end of this year. The behemoth chip enterprise’s layoff is part of its significant measures to reduce US$10 billion in cost savings in 2025.
“This is painful news for me to share, and I know it will be even more difficult for you to read. This is a tough day for Intel as we make some of the most consequential changes in our company’s history. Our revenues have not grown as expected, and we have yet to benefit from powerful trends like AI fully. Our costs are too high; our margins are too low,” Intel CEO Pat Gelsinger said in the memo.
As a part of its other priorities, Intel will also review overall active projects and equipment, aiming to shift its focus toward capital efficiency and normalized spending levels. This move is expected to reduce its capital expenditure by over 20%, and the company plans to minimize goods sold by roughly US$1 billion in 2025.
Intel reported a loss of $1.6 billion for Q2 2024, substantially more than the $437 million it lost last quarter. Its second-quarter revenue also fell 1% year over year, becoming US$12.8 billion. Following this restructuring move, Intel shares plunged around 26% to US$21.48 at the close of trading on Friday (08/02), the second worst decline after the 31% decline in the value of its shares in July 1974. Intel’s capitalization is also below US$100 billion.
“Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones. Second-hald trends are more challenging than we previously expected, and we are leveraging our new operating model to take decisive actions that will improve operating and capital efficiencies,” Gelsinger added.
This week, Intel will announce a companywide enhanced retirement offering for eligible employees and broadly offer an application program for voluntary departures. In the future, the company will focus on its other efficiency priorities, including:
- Simplifying Our Portfolio: Intel will complete actions this month to streamline our businesses. Each business unit is conducting a portfolio review and identifying underperforming products. The team aims to integrate critical software assets into our business units to accelerate our shift to systems-based solutions.
- Maintaining Growth Investments: Intel’s IDM2.0 strategy is unchanged. Having fought hard to reestablish our innovation engine, we will hold the critical investments in our process technology and core product leadership.
- Suspending Our Dividend: The company will suspend its stock dividend beginning next quarter to prioritize investments in the business and drive more sustained profitability.
