Intel confirms plans to lay off 15,000 workers after poor performance in 2024
Intel has confirmed that it plans to lay off 15% of its workforce, totaling around 15,000 employees, confirming earlier speculation.
The decision follows a disappointing second quarter and is part of a broader strategy to achieve $10 billion in cost savings by 2025.
Intel CEO Pat Gelsinger shared the news in a letter to employees, emphasizing the urgent need to align the company’s cost structure with the new business model.
Intel confirms major layoffs
“Our revenues haven’t grown as much as we expected… Our costs are too high, our margins are too low,” Gelsinger said, adding that the company needed “bolder actions” to address challenges such as a “tougher than previously anticipated” second half of the year and the fact that the company has yet to benefit from the AI trend.
Despite a roughly 10% increase in headcount since 2020, Intel’s annual revenue has fallen by a troubling $24 billion. The company’s most recent earnings results showed a 1% decline in revenue compared to the prior year, attributed to gross margin headwinds related to its AI PC products.
Intel’s revenue for the three months ended June 29 was $12.8 billion. The CEO added: “Our financial performance in Q2 was disappointing, even as we achieved important product and process technology milestones.”
Intel CFO David Zinsner noted, “By reducing our expenses, we are taking proactive steps to improve our earnings and strengthen our balance sheet.”
In addition to the layoffs, Intel offers a voluntary severance program and a comprehensive retirement package for eligible employees.
Ny Breaking has reached out again to get more information on how affected employees will be supported.