After losses, Intel to lay off over 15K employees

The chipmaker giant is downsizing its workforce after reported losses of $1.6 billion.

Intel reported unsatisfactory financial results for the second quarter of 2024. “Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones,” admitted Intel’s CEO, Pat Gelsinger, in a press release.

The company is about to implement a $10 billion cost reduction plan, that will include cutting the cost of R&D and marketing, sales, general and administrative, and reducing capital expenditures by more than 20% this year.

The budget tightening will also include a 15% headcount reduction. The company currently employs nearly 125,000 workers, which means that the layoffs might affect almost 19,000 employees. In a memo to employees, Intel’s CEO wrote that its headcount will be reduced by “roughly 15,000 roles.”

“This is painful news for me to share. I know it will be even more difficult for you to read,” writes Gelsinger. “Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate.”

The CEO adds that the company's revenues have not grown as expected and that it has not yet fully benefited from powerful trends like AI.

“Our costs are too high, and our margins are too low. We need bolder actions to address both,” he said. We will reduce layers, eliminate overlapping areas of responsibility, stop non-essential work, and foster a culture of greater ownership and accountability.”