Intel is planning to laying off over 15,000 workers as part of a USD 10 billion cost-saving plan for 2025. This will result in a reduction of over 15 percent of the current workforce of 125,000 employees, potentially affecting up to 19,000 people. In addition to the layoffs, Intel plans to reduce its research and development (R&D) and marketing spending by billions each year through 2026.
Capital expenditures will also be reduced by more than 20 percent this year. The company aims to stop non-essential work, review all active projects and equipment, and make necessary adjustments to its expenditures.
Although Intel's second-quarter revenue was down by only 1 percent year over year, the company faced significant losses in its chipmaking Foundry business due to investments in new factories and extreme ultraviolet (EUV) lithography. The losses totaled USD 7 billion in operating losses in 2023 and another USD 2.8 billion in the most recent quarter.
However, Intel's PC and server businesses remained profitable, and the company is set to receive up to USD 8.5 billion in funding from the CHIPS Act.
Intel's current position
From a technology leadership standpoint, Intel is not a major player in AI server chips like Nvidia and is still working to make a mark in the graphics domain. It had to make significant changes to its flagship laptop chips to address competition from Arm-based chips and is increasingly relying on TSMC for chip production.
Additionally, Microsoft has moved away from Intel chips in its latest consumer hardware, and Intel is addressing potential issues with its desktop CPUs.
Overall, Intel is taking significant steps to streamline its operations, address challenges in its business segments, and remain competitive in the rapidly evolving tech industry.
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