Intel to cut thousands of jobs as PC demand slows: report
PC sales fell 15% in the third quarter from a year ago and Intel has already warned about reduced 2022 sales
The job axe may soon be coming down at Intel.
The semiconductor manufacturer is reportedly planning a major reduction in its workforce, as the company looks to cut costs and deal with a slowdown in the personal computer market, according to Bloomberg.
The layoffs will be announced as early as this month, possibly in connection with its third-quarter earnings report on Oct. 27.
As of July, the chipmaker had 113,700 employees.
INTEL FREEZES HIRING IN A KEY DIVISION FOR AT LEAST TWO WEEKS
Intel Processor Core i5 2500K. (iStock / iStock)
Some divisions, including Intel’s sales and marketing group, could see cuts affecting about 20% of staff, according to people familiar with the situation.
Intel declined to comment in an email to Fox Business.
Intel is facing a steep decline in demand for PC processors.
PC sales tumbled 15% in the third quarter from a year earlier, according to IDC.
In July, the company warned that 2022 sales would be about $11 billion lower than it previously expected.
INTEL GAVE CEO PAY PACKAGE WORTH NEARLY $180 MILLION AMID TURNAROUND EFFORT
Analysts are predicting a third-quarter revenue drop of roughly 15%. And Intel’s once-enviable margins have shrunk.
Intel CEO Pat Gelsinger. (Fox Business Travel)
They’re about 15 percentage points narrower than historical numbers of around 60%.
During its second-quarter earnings call, Intel acknowledged that it could make changes to improve profits.
"We are also lowering core expenses in calendar year 2022 and will look to take additional actions in the second half of the year," Chief Executive Officer Pat Gelsinger said at the time.
INTEL TO INVEST AT LEAST $20 BILLION IN OHIO CHIP-MAKING FACILITY
In June, Intel reportedly was pulling back the reins on hiring for a key company division, according to a memo reviewed by Reuters.
Intel logo and semiconductor. (iStock / iStock)
For a two-week period, the company was freezing hiring in the unit responsible for PC desktop and laptop chips, as part of a series of cost-cutting measures.
At that time, other cost-cutting measures included canceling some travel for the group immediately, cutting back on industry conferences and instructions to hold group meetings virtually when possible.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| INTC | INTEL CORP. | 24.09 | +0.08 | +0.33% |
Intel’s last wave of layoffs happened in 2016, when it trimmed about 12,000 jobs, or 11% of its total.
CLICK HERE TO READ MORE ON FOX BUSINESS
Intel shares slipped 0.6% to $25.04 in the regular trading session on Tuesday.
Shares gained fractionally in extended hours.