Intel, a US-based semiconductor company, has announced a workforce reduction plan that aims to cut 15% of its jobs, as reported by Bloomberg on July 31 2024.
This move is part of a broader $10bn cost reduction strategy designed to enhance efficiency and competitiveness in the market.
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The job cuts are expected to affect approximately 17,500 employees, as confirmed by Intel, reports Reuters.
The majority of the workforce reduction is expected to be completed by the end of 2024.
Intel disclosed these measures alongside its second-quarter results, which showed a net loss of $1.6bn, a significant downturn from the $1.5bn profit reported in the same period last year.
The company’s revenue also saw a slight decline to $12.8bn, a 1% decrease from $12.9bn the previous year.
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By GlobalDataIntel’s initiatives include a structural and operational realignment, with plans to reduce operating expenses and capital expenditures by more than $10bn in 2025 compared to earlier projections.
This will involve streamlining operations and significantly cutting spending and headcount, particularly in research and development and marketing, general and administrative expenses.
Intel targets reducing these expenses to about $20bn in 2024 and approximately $17.5bn in 2025, with further cuts anticipated in 2026.
In a bid to prioritise liquidity and support necessary investments for its strategic execution, Intel will also suspend its dividend starting in the fourth quarter 2024.
Intel CFO David Zinsner said: “Second-quarter results were impacted by gross margin headwinds from the accelerated ramp of our AI PC product, higher than typical charges related to non-core businesses and the impact from unused capacity.
“By implementing our spending reductions, we are taking proactive steps to improve our profits and strengthen our balance sheet. 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.”
