Is Intel planning large layoffs?
That’s the information from Bloomberg, which cited nameless sources aware of the state of affairs. Intel hasn’t supplied any public remark, though CEO Pat Gelsinger beforehand introduced his intention to chop firm bills this yr.
The variety of potential layoffs is unclear, with Bloomberg citing “hundreds.” Intel presently has 121,100 staff worldwide. If the chip-maker follows the sample established at different huge tech corporations, it’d goal preliminary layoffs at gross sales and advertising and marketing departments quite than reducing into its technologist base.
Whether or not or not these layoffs truly occur, Intel has its technique mapped out for the subsequent few years. Earlier in 2022, it introduced plans to construct what Gelsinger referred to as the “largest silicon manufacturing location on the planet” in Columbus, Ohio. That facility, which is able to embrace two chip factories, might make use of greater than 3,000 as soon as it comes on-line in 2025. Intel joins corporations comparable to Samsung and TSMC which have pledged to take a position important funds into new chip-fabrication services all through the nation.
Though it grew right into a behemoth on the power of designing and advertising and marketing its personal chips, Intel faces aggressive headwinds from corporations comparable to Apple which have determined to fabricate their very own silicon in-house. That’s compelled Intel to pivot to a brand new market: manufacturing chips to shoppers’ specs. This so-called “foundry initiative” will value billions of {dollars} (the $20 billion that Intel invested in its preliminary fabrication services is only a begin) and take years to completely actualize.
If that wasn’t sufficient strain, Intel’s current companies now face macroeconomic issues, together with inflation and a slackening demand for every type of chips. PC shipments declined 19.5 p.c year-over-year within the third quarter of 2022, in response to analysis agency Gartner. “Whereas provide chain disruptions have lastly eased, excessive stock has now turn into a significant concern given weak PC demand in each the patron and enterprise markets,” Mikako Kitagawa, Director Analyst at Gartner, wrote in a press release accompanying the information. “Again to highschool gross sales ended with disappointing outcomes regardless of large promotions and value drops, attributable to a scarcity of want as many customers had bought new PCs within the final two years. On the enterprise aspect, geopolitical and financial uncertainties led to extra selective IT spending, and PCs weren’t on the prime of the precedence listing.”
That’s a variety of challenges—and alternatives—for anyone firm to deal with. The alternatives Intel makes over the subsequent few years are possible existential—can it innovate its solution to a brighter future?