Chipmaker Intel has announced plans to cut 15% of its workforce, amounting to about 15,000 jobs, in an effort to restructure its operations and remain competitive in the market. The company aims to save $10 billion by 2025 through these measures, as outlined by CEO Pat Gelsinger in a recent memo to staff.
Gelsinger emphasized the need to align the company's cost structure with its new operating model and address challenges such as stagnant revenue growth and low profit margins. The decision to reduce the workforce comes after a disappointing quarter for Intel, prompting the company to take steps to streamline its operations.
In addition to the job cuts, Intel will be offering an enhanced retirement package for eligible employees and a voluntary departure program. The majority of layoffs are expected to be completed within the year, with the company also suspending its stock dividend as part of cost-cutting measures.
Despite these efforts, Intel reported a loss in the second quarter, with a decline in revenue compared to the previous year. The company's stock value dropped significantly in after-hours trading following the announcement of the layoffs.
Intel's strategic focus includes investments in AI technology and the development of its foundry business for semiconductor manufacturing. The company aims to capitalize on the growing demand for AI chips and position itself for long-term success in the evolving chip market.
Intel has received support from the U.S. government, including funding under the CHIPS and Science Act, to bolster its domestic manufacturing capabilities. The company's plans to open a new plant in Ohio have been lauded by President Joe Biden as a significant step towards revitalizing domestic manufacturing and creating high-paying jobs.
While Intel faces challenges in restructuring its operations and adapting to market demands, the company remains optimistic about its future prospects in the chip industry. With a focus on innovation and strategic investments, Intel aims to solidify its position as a key player in the semiconductor market.
