In a memo sent to workers on Thursday, Intel said it would be letting go of more than 15% of its staff, or 15,000 people. After a bad earnings report and forecasts for the second quarter, the huge hiring is part of a big plan to cut spending by $10 billion by 2025.
“Our sales have not grown as we had hoped, and we have not yet fully benefited from strong trends like AI,” CEO Pat Gelsinger wrote in a memo to workers. “Our margins are too low and our costs are too high.” We need to take bigger steps to deal with both of them, especially since our financial results and prospects for the second half of 2024 are worse than we thought they would be.
Gelsinger says that Intel hasn’t been able to take advantage of the AI boom like other tech companies, like Nvidia, have. About 25 years ago, Intel led the tech industry’s change with CPU chips. However, the company has been slow to adapt to newer forms of computing like AI and smartphones. Gelsinger says that Intel’s yearly sales dropped $24 billion from 2020 to 2023, even though the company hired 10% more people during that time. That’s a harsh deal for other chipmakers who have seen their profits and stock prices soar during the AI boom.
Intel’s sales dropped by 1% in the second quarter compared to the same time last year. The company said that its AI PC goods were hurting its gross margins, which led to the loss. The company is also stopping its dividend to shareholders in the fourth quarter of 2024. It also expects “more challenging” trends in the second half than it had previously thought.
Also Read: A Message From Sundar Pichai to the Google Staff: More Layoffs Are Coming
In addition to the layoffs, the memo says that Intel will let all of its workers apply for a “voluntary departure” program next week. The company is also announcing a better retirement plan for all eligible workers.
What do you say about this story? Visit Parhlo World For more.
