Intel(INTC.US) plans to cut thousands of jobs to cut costs and fund its ambitious plans to recover from declining profits and falling market share, according to people familiar with the company’s plans. The job cuts could be announced as early as this week, according to people familiar with the company’s plans. Intel has about 110,000 employees, not including its chipmaking divisions.
Under the leadership of chief executive Pat Gelsinger, Intel has invested heavily in research and development to improve its technology and regain its dominance in the semiconductor industry, which has been eroded under the previous CEO and overtaken by rivals such as AMD(AMD.US).
Other chipmakers, led by Nvidia(NVDA.US), are racing to develop lucrative semiconductors tailored to high-performance artificial intelligence tasks. Intel is also struggling to balance demand for its core business — computer chips for laptops and desktops.
Gelsinger believes Intel can improve its technology and has started a plan to build semiconductor factories for other chipmakers. Last week, Intel named Naga Chandrasekaran, a former senior vice president of development at Micron Technology(MU.US), as its chief global operations officer, to oversee the company’s overall manufacturing.
After announcing layoffs starting in October 2022, Intel cut about 5% of its workforce in 2023 and expects to cut to 124,800 by the end of 2023. The company has also slowed spending in other areas, and expects to save more than $10bn in costs by 2025.
Analysts expect Intel to report flat revenue in the second quarter. Wall Street expects modest growth in the second half of 2024, with total sales up 3% to $55.7bn, the first annual revenue growth since 2021.
Shares of Intel rose more than 1% after hours, trading at $30.48 at the time of writing.