Intel joins the wave of mass layoffs in the technology industry, just as they have done Tesla, amazon, Google Y Goal, among others. According to reports from Bloombergthe Santa Clara, California-based company plans to cut thousands of jobs.
With this measure, they seek to reduce costs and mitigate their recent drop in income, due to the collapse in demand for their PC processors. The personnel cut would be announced on October 27, just when they present their results for the third quarter, anonymous sources told the outlet.
In accordance with Mandeep Singhanalyst of Bloomberg Intelligence, the layoffs could reduce Intel’s operating expense by 10-15%. He points out that the chip giant has to cut $20 billion to $30 billion in spending.
The company closed July with a staff of 113,700 workers all over the world. The report does not specify how many of these will remain unemployed or in which regions or countries the cut will be greater. What is known is that thousands will be affected, since in some areas, such as sales and marketing, layoffs could reach 20% of staff.
It’s not the first time Intel has faced a mass layoff. In April 2016, they eliminated 12,000 jobs, which meant laying off 11% of their staff. They said the decision was due to a restructuring, in order to focus on cloud services and the Internet of Things (IoT).
Since then, the company has made more discreet cutbacks and closed several divisions, including its modem, cellular and drone units. In early 2022, it followed in the footsteps of other companies in the technology industry and froze hiring.
The crash in the PC market that affects Intel
The pandemic triggered the demand for devices such as PCs, tablets and mobile phones, for remote work and distance education. Of course, the company expected a drop in demand for equipment (and therefore chips) at any time, due to the change in post-pandemic consumption habits.
In the second half of this year, consumer spending has suffered from inflation, rising interest rates and geopolitical tension.
According to the report, the PC market plunged 19.5% in the third quarter of 2022, the biggest drop in more than two decades. In the same period, the sales of firms such as lenovo, Dell Y hp they fell by 15% year-on-year due to the low demand for personal computers.
The CEO of Intel, Pat Gelsinger, reported in July that the company’s revenue fell 25% to $7.3 billion. Therefore, they had to adjust their predictions and now expect their annual revenue to be $11 billion less than previously projected.
On that occasion, Gelsinger announced that the company “will seek to take additional measures during the second half of the year” to “reduce expenses” and improve profits. One of those measures would be to raise the prices of its processors and other chips later this year, due to “inflationary pressures.”
So far, Intel has made no public comment on the reports.
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