Intel launches a new wave of layoffs to bring about change

Intel has launched a new wave of layoffs as part of a major restructuring of the company, CRN reports. Because things are not really going well for Intel at the moment. It has not achieved its targets and for this reason Intel’s CEO Pat Gelsinger had already announced in 2022 that it would be cutting back in some areas, partly due to the sharp drop in demand. In clear terms, this means that the company wants or needs to reduce its expenditure by 10 million dollars by 2025.

In fact, no concrete figures have yet been given as to how many redundancies have taken place. There has only been one published figure so far, but it relates to individual rounds of redundancies. For example, 50 employees or more have been made redundant within a 30-day period at their offices in California. However, the company is hopeful about the future and is supporting its employees in the current restructuring process. Interestingly, this new wave of layoffs was announced shortly after Intel unveiled its new financing plans.

“With the objective of continuing to deliver on company strategy and drive outcomes for its customers, Intel’s [Sales and Marketing Group] announced changes to its organizational structure. We are confident in Intel’s future and are committed to supporting all employees through this process, including treating impacted employees with dignity and respect”

Behind the scenes, Intel separated its businesses around its chip manufacturing arm, now known as Intel Foundry, into an independent contract chip manufacturing company to compete with Asian foundry giants TSMC and Samsung. However, it is estimated to have made a loss of 7 billion dollars in its first year.

The company has stated that losses will peak in 2024. However, the business should achieve a balanced operating margin by mid-2030. However, this can only work if the non-GAAP gross margin of 40 percent and a non-GAAP operating margin of 30 percent are targeted.

Source: CRN