Intel to eliminate thousands of jobs in cost-cutting move

[midian182]

In brief: Intel looks set to join the list of companies that are making massive cuts to their workforces this year. Team Blue is reportedly letting go of thousands of employees as it looks to reduce costs amid increasing pressure from shareholders and a declining market performance.

Intel hasn't yet made the cuts official, but an announcement may arrive as early as this week, writes Bloomberg, which cites anonymous people familiar with the company's plans.

Intel has had to sit and watch as rival tech giant Nvidia rose to the third most valuable company in the world, thanks to the generative AI boom mostly powered by its advanced chips.

Intel has also seen its CPU market share slowly eroded by AMD over the years. Chipzilla CPUs are still found in two-thirds of Steam survey participants' machines and figures from Mercury Research (graphs above and below) show the same kind of trend going on desktop and mobile CPUs, while the impact is more profound in the profitable server market. AMD has slowly but surely increased its user share.

Professional workstation users seem even more likely to opt for Team Red. Custom PC builder Puget Systems' Hardware Trends survey for 2023 shows that Threadripper and Threadripper Pro chips made up 90% of its workstation orders last year.

Bloomberg notes that Intel CEO Pat Gelsinger has been investing heavily in research and development, such as the fab manufacturing program, designed to bring the company back to prominence in the semiconductor industry.

Intel reduced its workforce by around 5% in 2023 to 124,800, having begun job cuts in October 2022. The company said the cost reductions are expected to save it up to $10 billion by 2025.

Intel will report its second-quarter earnings on Thursday, July 31. Analysts expect that growth for the quarter will be flat compared to the same period a year earlier, though Wall Street believes growth will increase slightly in the second half of 2024, with sales increasing 3% to $55.7 billion for the full year, marking the first annual revenue increase since 2021.

Intel is also dealing with a crashing CPU crisis right now. The company says the problem stems from a faulty microcode algorithm that is overvolting the Raptor Lake processors. A patch will arrive next month, but it is not a guaranteed fix and is more to prevent unaffected processors from experiencing issues. Those who have already suffered damage will have to replace their CPUs.

Permalink to story:

Intel to eliminate thousands of jobs in cost-cutting move

 

[ScottSoapbox]

Glad we’ve been giving them billions in taxpayer CHIPS money to create jobs (and “national security of course).

 

[wiyosaya]

I doubt this will fix Intel's problems. I also doubt the CHIPS money will fix their problems. If Intel reneges on the CHIPS promises, maybe congress will teach them a lesson (it might be one thing the current political climate will find unity on).

 

[LemmingO]

Bean counters at the helm. This is bad for Intel and for consumers in general.

 

[NumberNine]

Glad we’ve been giving them billions in taxpayer CHIPS money to create jobs (and “national security of course).

Corporate welfare. Socialism for favored banks and corporations, capitalism for the rest of us.

 

[b10nutz]

Start with CEO,CFO, CXY (all Chief jobs), then lawyers and marketing!

 

[MSIGamer]

Start with CEO,CFO, CXY (all Chief jobs), then lawyers and marketing!

Indeed lol. 80% of the cost, 5% of the knowledge. And you're left with the engineers that know how to actually get them out of the mess they're in.
I'm suspecting the CEO will still keep his salary though.
Wonder how many employees you can hire for one CEO.

 

[dirtyferret]

Corporate welfare. Socialism for favored banks and corporations, capitalism for the rest of us.

socialism is loved, idealized, and desired by and for all corporations & rich people. However if it's applied to regular people its a blight on society and you're a communist for thinking anything but that!

 

[LemmingO]

Indeed lol. 80% of the cost, 5% of the knowledge. And you're left with the engineers that know how to actually get them out of the mess they're in.
I'm suspecting the CEO will still keep his salary though.
Wonder how many employees you can hire for one CEO.

You can bet your *** the board will still award him a huge bonus for "getting the company over this difficult period"

 

[passwordistaco]

Stock was going to take a beating after the microcode "fix" fails to solve the problem. Got to maximize shareholder value!

 

[Rudyduu]

Glad we’ve been giving them billions in taxpayer CHIPS money to create jobs (and “national security of course).

That has nothing to do with anything.

 

[Art C]

That has nothing to do with anything.

Sure it does. Intel knows that long term it can't keep up with the consumer game so it wants to spend the next season of its life as a government contractor. It wants to be the next Lockheed.

 

[dihartnell]

Bean counters at the helm. This is bad for Intel and for consumers in general.

Their CEO is an engineer. If a bean counter was at the helm then they would have kept on cutting in early 2023 and not stopped.

 

[birthdaymonkey]

I've been a bit of an Intel fan - most of the systems I've built over the past 20 years (and before) have used their CPUs: AMD only seriously stepped up the competition with Zen 3, after all. I also find that Intel products "just work" better than the competition when it comes to chipsets, NICs, memory controllers, etc. Their GPU division shows promise too.

However, falling far behind TSMC in the fab business was an inexcusable error. Intel had a huge process technology lead through the mid 2010s - then came the 14nm++++ fiasco while TSMC moved relentlessly forward to smaller process nodes (like Intel used to do during the "tic toc" era). Intel also rested on their laurels for a decade with their x86 CPU designs while AMD innovated their way out of the Bulldozer debacle to become extremely competitive in the consumer and server markets. Intel managed to lose their decade-plus relationship with Apple to provide x86 CPUs for Mac products. And now, finally, we find that 13th and 14th gen chips are failing at an unprecedented rate.

In short, while there have been bright spots (like the 12th gen parts and hopefully the upcoming response to AMD's 9000 series), the failure of C-suite leadership at Intel over the past decade is nothing short of spectacular. I don't know how these corporate officers - making millions per year regardless of their poor performance - manage to f*** up so badly and so consistently. I know there have been changes and that not all of the shortcomings outlined above can be laid at the feet of current leaders. Nevertheless, the pattern of constant mismanagement and general bungling is plain. What must Moore, Noyce, and Grove (not sure which of them are still alive) be thinking these days about their once-great company?

I bought an i7 14700K rather than a 7900X or 7800X3D because I thought the Intel platform would be more stable and problem free. Ha! Now I'm just hoping and praying that my CPU doesn't fail before the patch comes out - if it even works. From my perspective, the only way Intel can really make this right is a full recall of their desktop chips (and maybe even mobile parts if they're afflicted). However, I realize that the logistics of a recall operation would be a nightmare and might even put the company in jeopardy.

If firing thousands is the response from the highly paid decision makers at Intel, it's time for a full cleanout of the C-suite. I don't see how laying off a whole bunch of innocent low-level employees is going to help. Are they the ones responsible for this situation? Doubtful. Deep cost-cutting is just a gimmick (at the expense of workers' livelihoods) to appease Wallstreet. Shame on you Intel - there's no excuse for this mess - and this is coming from a fan, not an AMD booster/shill.

 

[ScottSoapbox]

That has nothing to do with anything.

It does. It shows government rewards underperforming companies as long as they donate and lobby.

 

[Endymio]

Glad we’ve been giving them billions in taxpayer CHIPS money to create jobs (and “national security of course).

The impetus for the CHIPs act was entirely for national security; government-subsidization of jobs for economic purposes is always a bad idea.

It shows government rewards underperforming companies as long as they donate and lobby.

The CHIPS Act was not "a reward". It's an attempt to bring semi manufacturing at least partially back to the US. And who else besides Intel would you have given money to attempt that? AMD? They don't make chips. TSMC? Oh yeah -- we gave them billions also.

If firing thousands is the response from the highly paid decision makers at Intel, it's time for a full cleanout of the C-suite

This firing has nothing to do with the current instability issue. It's a response to the fact that Intel revenue was $63B in 2022, $54B in 2023, and lower still in 2024. When sales decline, you need fewer workers.

Indeed lol. 80% of the cost, 5% of the knowledge.

Why can't people learn math? The total salary of Intel's entire C-Suite -- CEO included -- is about 1% of total revenue.

Wonder how many employees you can hire for one CEO.

In Intel's case, about 80 engineers. Tell you what -- show us a multinational corporation doing well with thousands of employees and no CEO, and we'll trade Gelsinger for 80 more headcount. Deal?