Intel Reportedly Plans Thousands of Layoffs Amid PC Market Slowdown
Intel plans to slash its employee numbers by the thousands in a bid to cut costs in the face of the slowing global PC market, a new Bloomberg report has claimed.
The company's sales and marketing teams could see cuts affecting around 20% of staff, said the report, citing people with knowledge of the matter who wished to remain anonymous.
The "major reduction in headcount" hasn't officially been made public, but it is expected to be announced as early as this month around the time of Intel's third-quarter earnings report on October 27. The last big wave of layoffs at Intel was in 2016, when about 12,000 people were made redundant. Based on the last count in July, Intel currently has around 113,700 staff.
The likes of Lenovo, HP, and Dell have all been impacted by a significant drop in PC sales due to global inflation and geopolitical instability, and the steep decline in demand for PC processors has negatively affected Intel's revenue.
Worldwide PC shipments went into free-fall in the third quarter, with overall sales declining by 18%, according to numbers compiled by Canalys. IDC provided similar findings, with sales falling over 15%, while Gartner reported PC shipments down 19.6% over the same quarter.
However, Intel's shares have been hit harder than other chipmakers as it struggles to win back market share lost to rivals like AMD. Earlier this year, Intel said 2022 sales would be around $11 billion lower than it had expected, and analysts are now said to be predicting a third-quarter revenue drop of about 15%. Intel's margins are also on the decline.
During its second-quarter earnings call, Intel pledged to cut expenses and make other changes to improve profits. Still, the short-term outlook remains poor. The chipmaker has not yet recovered from the impact of Apple's decision in 2020 to move away from using Intel processors in its Mac computers and adopt custom Apple silicon instead. It has also lost its prime position in microprocessor manufacturing to TSMC and Samsung Electronics.
To counter market conditions and boost innovation, Intel is looking to sell more advanced AI-powered chips to the data-center market and is working with TSMC to build chips using the Taiwanese foundry's 5nm process. Intel also plans to sell shares of its Mobileye self-driving technology business in an initial public offering, which has been valued at $30 billion.