Previously we reported that Intel is expected to lay off thousands of its employees as a part of its cost reduction and business growth strategy. And now, Intel has announced the same. It is going to drop its workforce significantly. This is a part of its $10 billion cost-saving plan for 2025.
Intel is reducing its workforce by 15%, which means over 15,000 employees out of its current 125,000 will be laid off. As per a report by the Verge, this number can reach up to 19,000. Intel might reduce R&D and marketing expenditures by billions each year through 2026, cut capital expenditures by more than 20% this year, and remove non-essential work completely.
Also read: Intel to layoff thousands of employees as it plays catch up in AI chip race
Further, the chipmaker will review all active projects and equipment to ensure cost efficiency. CEO Pat Gelsinger shared a memo with his staff that brought the painful news to them. The memo read, “We have moved our All Company Meeting to today, following our earnings call, as we are announcing significant actions to reduce our costs. We plan to deliver $10 billion in cost savings in 2025, and this includes reducing our headcount by roughly 15,000 roles, or 15% of our workforce. The majority of these actions will be completed by the end of this year.”
All this follows the recent report of Intel losing over $1.6 billion in Q2 2024. Last year, this number was at $437 million. Acknowledging the disappointing performance of the company, Gelsinger said that much of this is also a result of not utilising trends such as AI on time.
But it’s not all bad at Intel. Its PC and server businesses remain profitable, with stable sales and the end of the PC sales slump earlier this year. It will also receive up to $8.5 billion in US government funding from the CHIPS Act.
