Intel CEO expected to propose cost-cutting measures to revive chip competition
Exclusive Reuters Reports indicate that Intel CEO Pat Gelsinger will present potential cost-cutting measures to the company’s board later this month.
Intel, citing an anonymous source familiar with the matter, said it plans to spin off redundant businesses and increase capital spending to address ongoing financial problems.
The California-based chipmaker recently reported quarterly revenue of $12.8 billion, down 1% year-over-year, while also forecasting comparable revenue for the next quarter of $12.5 billion to $13.5 billion.
Intel could save even more costs
Gelsinger expressed concerns about the company’s second-quarter results: “Our financial performance in the second quarter was disappointing, even though we achieved important product and process technology milestones.”
The company’s CFO David Zinsner blamed gross margin headwinds from Intel’s AI PC efforts and “higher-than-normal” costs related to non-core businesses for the poor performance.
Reuters reports that the CEO could announce plans to sell its programmable chip division Altera.
Gelsinger’s plans may also include a pause β or termination β of Intel’s already-shelved $32 billion plans for a factory in Germany.
Intel was once the market leader, but has struggled to catch up with other established rivals in the AI ββrace. It currently has a market cap of $94.04 billion, putting it far behind AMD ($240.44 billion market cap, $5.8 billion last quarter revenue) and Nvidia ($2.93 trillion market cap, $30.0 billion last quarter revenue).
The news comes about a month after the company laid off about 15,000 employees, representing about 15% of its workforce. At the time of the announcementGelsinger said: βWe need to align our cost structure with our new operating model and fundamentally change the way we operate.β
Ny Breaking has asked Intel to confirm the report, but the company did not immediately respond.