Intel Corp to Cut Thousands of Jobs Amid Strategy Shift to Boost Earnings and Market Share

Intel Corp is gearing up to slash thousands of jobs in a strategic move aimed at reducing costs and bolstering efforts to recover from declining earnings and market share losses. This significant workforce reduction is expected to be announced as early as this week, according to sources familiar with the situation who requested anonymity due to the confidential nature of the information.

Currently employing about 110,000 people, excluding those from units being spun off, Intel is set to reveal its second-quarter earnings on Thursday. Under the leadership of CEO Pat Gelsinger, Intel has been heavily investing in research and development to enhance its technology and reclaim its leadership position in the semiconductor industry.

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Intel’s Market Share Slips as AMD Gains Ground

Intel’s previous leadership saw the company’s dominant market position weaken, allowing competitors like AMD to gain ground and capture significant market share. An Intel spokesperson has declined to comment on the impending job cuts.

Following the news of potential layoffs, Intel shares experienced a slight increase of about 1 percent, reaching $31.11 in late trading. Meanwhile, other companies, particularly NVIDIA Corp., have surged ahead in producing high-demand semiconductors designed for artificial intelligence applications. Intel, on the other hand, continues to grapple with inconsistent demand for its core products—chips for laptops and desktop computers.

In an effort to enhance Intel’s technological capabilities, Gelsinger has launched a plan to build factories that will produce semiconductors for other chipmakers. As part of this initiative, Intel recently appointed Naga Chandrasekaran from Micron Technology Inc. as the chief global operations officer to oversee the company’s manufacturing operations.

This workforce reduction is not without precedent. Intel reduced its headcount by about 5 percent in 2023, bringing the total to 124,800 by the end of the year, following job cuts that began in October 2022. Additionally, Intel has slowed spending in other areas, aiming to achieve cost savings of up to $10 billion by 2025.

Analysts forecast that Intel’s second-quarter revenue will be flat compared to the same period last year. However, they predict modest growth in the latter half of 2024, with total sales expected to increase by 3 percent to $55.7 billion for the full year. If these projections hold, it would mark Intel’s first annual revenue increase since 2021.

FAQs

What is the reason behind Intel’s job cuts? Intel is cutting jobs to reduce costs and finance efforts to recover from declining earnings and market share losses.

When is Intel expected to announce the job cuts? The announcement of the layoffs could happen as soon as this week.

How many employees does Intel currently have? Intel employs about 110,000 people, excluding workers from units being spun off.

Who is leading Intel’s efforts to enhance technology and recover market share? CEO Pat Gelsinger is leading Intel’s efforts to invest in research and development to enhance technology and regain market leadership.

Which companies have gained market share at Intel’s expense? Competitors like AMD and NVIDIA have surged ahead, capturing significant market share from Intel.

What are Intel’s revenue projections for 2024? Analysts predict that Intel’s total sales will increase by 3 percent to $55.7 billion for the full year, marking the first annual revenue increase since 2021.

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Conclusion

Intel Corp’s decision to cut thousands of jobs is a strategic move to streamline costs and support the company’s efforts to recover from declining earnings and market share. Under CEO Pat Gelsinger’s leadership, Intel is heavily investing in research and development to restore its dominance in the semiconductor industry. While facing stiff competition from companies like AMD and NVIDIA, Intel’s plans to build semiconductor factories and strengthen its manufacturing operations are crucial steps towards achieving growth and market recovery. As the company prepares to announce its second-quarter earnings, all eyes will be on how these strategies unfold and their impact on Intel’s financial performance.