Intel plans to cut thousands of jobs

It is reported that in an attempt to stay afloat amid the recent decline of the personal computer market, Intel intends to lay off numerous employees. Another reason may be the increased costs in recent years. It’s also said that the number of reduced employees could reach several thousand.

At the end of October, during the earnings calls of the Q3, the corporation also intends to provide information on employee layoffs. Back in the middle of summer, Intel had a staff of more than 110 thousand people. There is a possibility that in some departments up to one-fifth of employees could be cut. For example, it could be sales and marketing department. It’s worth noting that due to worsening market conditions and fears of a possible recession, Intel and companies in the industry stopped accepting new employees at the beginning of 2021.

In the last years, Intel has had serious rivals in the PC processor market, such as Advanced Micro Devices Inc., due to which Intel is desperately attempting to regain its position. However, back in the middle of summer, the corporation announced that it doesn't hope for the former profit. As Intel estimates itself, the profit will be more than 10 million lower than predicted. Analysts tend to think the same, according to their estimates’ revenue for the third quarter will be 15% lower than previously expected.

Intel CEO Pat Gelsinger, back when the Q2 earnings call was held, announced his intention to reduce costs this year in order to increase profits. Moreover, he noted that the second half of 2022 will be marked by serious measures on the part of the company. 

Mandeep Singh, an analyst at Bloomberg Intelligence, made his own assumptions about the cuts being made by Intel. In his opinion, the cuts are necessary to reduce the company's costs, and by cutting staff, it’s possible to save up to 10-15%, which amounts to 25 to 30 billion dollars.

The Bloomberg Intelligence analyst also talks about a possible dividend cut, since computer prices fall, flat, as does demand for Intel. On the other hand, Singh noted that fears about the dividend may not be justified, because Intel plans to sell shares of its subsidiary Mobileye (developer of advanced of driver assistance systems, or ADAS).

In order to regain industry supremacy, Intel is developing and releasing new processors, and selling as many as possible, surpassing the sales figures of AMD and Nvidia Corp. is the most essential part of the company's strategy.

The corporation's CFO has a positive outlook for the future of Intel. David Zinsner believes that at the moment, Intel is well positioned to deliver maximum output. Although, he also notes that Intel expects the costs provided for changing the structure of the corporation, which indicates an imminent reduction in staff.

Some of Intel's rivals in the field of processor producers, such as Nvidia and Micron Technology Inc. aren’t planning staff cuts yet, while others, such as Oracle Corp. and Arm Ltd. have already begun layoffs.