Intel to dump at least 15 percent of staff to save costs
(2024/08/01)
- Reference: 1722545767
- News link: https://www.theregister.co.uk/2024/08/01/intel_to_ax_headcount/
- Source link:
Breaking Intel plans to layoff more than 16,000 workers, or at least 15 percent, with most cuts coming by the end of the year as the x86 giant scrambles to get its finances under control.
"By implementing our spending reductions, we are taking proactive steps to improve our profits and strengthen our balance sheet," Intel CFO David Zinsner wrote in the mega-corp's second-quarter earnings [1]report Thursday.
We expect these actions to meaningfully improve liquidity and reduce our debt balance
"We expect these actions to meaningfully improve liquidity and reduce our debt balance while enabling us to make the right investments to drive long-term value for shareholders."
While Intel was widely [2]expected to announce sweeping layoffs, the scope of the staff reductions is larger than anticipated. "Intel expects to reduce headcount by greater than 15 percent with the majority completed by the end of 2024," the biz stated. That's up from the eight percent rumored this week.
The Xeon maker employs about 110,000 workers across its various divisions, putting the total cuts at more than 16,000.
[3]
These cuts will impact multiple divisions including research and development, marketing, and general and administrative roles. Intel will also cut capital expenditures by more than 20 percent to between $25 and $27 billion in 2024 now that it's achieved its goal of five process nodes in four years. The x86 titan plans to cut cap-ex spend back further in 2025 to $20-23 billion.
[4]
[5]
"Intel is now shifting its focus toward capital efficiency and investment levels aligned to market requirements," the company's earnings report reads.
Whether these reductions will impact Intel's foundry build, we'll have to wait and see.
[6]Legal eagles target Intel for class action over cooked Raptor Lake CPUs
[7]Intel to deliver fix for Raptor Lake CPUs made 'unstable' by voltage snafu
[8]Game dev accuses Intel of selling 'defective' Raptor Lake CPUs
[9]UK court rules in Intel's favor in R2 Semi power patent case
And in a blow to shareholders, Intel is also waving goodbye to its quarterly dividend beginning in Q4, as it recognizes "the importance of prioritizing liquidity to support the investments needed to execute its strategy."
Combined, Intel expects these cuts to save it more than $10 billion in 2025, which it says will help it "achieve clear line of sight toward a sustainable business model."
[10]
Intel shares are trading down about 20 percent in after-hours at time of writing. This is a developing story; we'll update it with more details as soon as possible.
Get our [11]Tech Resources
[1] https://www.intc.com/news-events/press-releases/detail/1704/intel-reports-second-quarter-2024-financial-results
[2] https://www.theregister.com/2024/07/31/intel_layoff_rumors/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZqwFhplnzNgoOkMSF2rtXwAAABA&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZqwFhplnzNgoOkMSF2rtXwAAABA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
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[6] https://www.theregister.com/2024/08/01/intel_raptor_lake_lawsuit/
[7] https://www.theregister.com/2024/07/23/intel_raptor_lake_instability_fix/
[8] https://www.theregister.com/2024/07/13/game_raptor_intel/
[9] https://www.theregister.com/2024/08/01/uk_intel_patent/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZqwFhplnzNgoOkMSF2rtXwAAABA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[11] https://whitepapers.theregister.com/
"By implementing our spending reductions, we are taking proactive steps to improve our profits and strengthen our balance sheet," Intel CFO David Zinsner wrote in the mega-corp's second-quarter earnings [1]report Thursday.
We expect these actions to meaningfully improve liquidity and reduce our debt balance
"We expect these actions to meaningfully improve liquidity and reduce our debt balance while enabling us to make the right investments to drive long-term value for shareholders."
While Intel was widely [2]expected to announce sweeping layoffs, the scope of the staff reductions is larger than anticipated. "Intel expects to reduce headcount by greater than 15 percent with the majority completed by the end of 2024," the biz stated. That's up from the eight percent rumored this week.
The Xeon maker employs about 110,000 workers across its various divisions, putting the total cuts at more than 16,000.
[3]
These cuts will impact multiple divisions including research and development, marketing, and general and administrative roles. Intel will also cut capital expenditures by more than 20 percent to between $25 and $27 billion in 2024 now that it's achieved its goal of five process nodes in four years. The x86 titan plans to cut cap-ex spend back further in 2025 to $20-23 billion.
[4]
[5]
"Intel is now shifting its focus toward capital efficiency and investment levels aligned to market requirements," the company's earnings report reads.
Whether these reductions will impact Intel's foundry build, we'll have to wait and see.
[6]Legal eagles target Intel for class action over cooked Raptor Lake CPUs
[7]Intel to deliver fix for Raptor Lake CPUs made 'unstable' by voltage snafu
[8]Game dev accuses Intel of selling 'defective' Raptor Lake CPUs
[9]UK court rules in Intel's favor in R2 Semi power patent case
And in a blow to shareholders, Intel is also waving goodbye to its quarterly dividend beginning in Q4, as it recognizes "the importance of prioritizing liquidity to support the investments needed to execute its strategy."
Combined, Intel expects these cuts to save it more than $10 billion in 2025, which it says will help it "achieve clear line of sight toward a sustainable business model."
[10]
Intel shares are trading down about 20 percent in after-hours at time of writing. This is a developing story; we'll update it with more details as soon as possible.
Get our [11]Tech Resources
[1] https://www.intc.com/news-events/press-releases/detail/1704/intel-reports-second-quarter-2024-financial-results
[2] https://www.theregister.com/2024/07/31/intel_layoff_rumors/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZqwFhplnzNgoOkMSF2rtXwAAABA&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZqwFhplnzNgoOkMSF2rtXwAAABA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZqwFhplnzNgoOkMSF2rtXwAAABA&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2024/08/01/intel_raptor_lake_lawsuit/
[7] https://www.theregister.com/2024/07/23/intel_raptor_lake_instability_fix/
[8] https://www.theregister.com/2024/07/13/game_raptor_intel/
[9] https://www.theregister.com/2024/08/01/uk_intel_patent/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZqwFhplnzNgoOkMSF2rtXwAAABA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[11] https://whitepapers.theregister.com/
Complacency…
Reiki Shangle
Yep, the British Leyland of the chip industry…
I really do hope they reach the other end, but once you’ve tripped up… Time to discard those laurels…
bazza
Hmm, I wonder if they remember sacking a load of staff before, leading to the problems they've been encountering ever since?
pro-logic
The job losses suck. I feel sorry for the people who lost their job.
I never realised that Intel was so huge! A ~120,000 staff, before this move. That is a big company!
And yet
Boris the Cockroach
slashing R & D will impact profits far more than the brief savings they'll give in the short term...
I wonder if the job cuts will get as far as chopping out 15% of the board too......
14 15 stop!
chivo243
I wonder how much of this is caused by the problems with the latest gen (fishy) chips?
What we really said...
That report had obviously been written by a Generative AI to put a positive spin on things... I shoved the bits in this article back into ChatGPT and asked it to reverse the process, apparently is should have said...
"By slashing our spending, we're desperately trying to salvage our profits and patch up our shaky balance sheet," Intel CFO David Zinsner wrote in the mega-corp's dismal second-quarter earnings report Thursday.
"We're forced to take these drastic measures to scrape together some liquidity and chip away at our overwhelming debt, all while hoping we can still manage to make investments that might, just maybe, offer some long-term value for shareholders."