Chipmaking giant and one of America’s biggest companies, Intel, has announced that it will lay off 15% of its workforce, about 15,000 employees, to drive a turnaround of its business to compete with other industry giants like Nvidia and AMD. The CEO of Intel Corp., Pat Gelsinger, sent a memo to his staff on Thursday saying that the company plans to save $10 billion in 2025.
Pat wrote in the memo, “Simply put, we must align our cost structure with our new operating model and fundamentally change how we operate. Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate.” He also mentioned that next week, the company will announce an “enhanced retirement offering” for eligible employees and an application program for voluntary departures.
The job cuts result from a disappointing quarter, as is the forecast. Moreover, the company plans to suspend its stock dividend as part of a broader plan to cut costs. Intel reported a loss in its second-quarter financials along with a slight decline in revenue. After the news, its stock plunged 19%, which will result in a $24 billion loss in market value When it opens on Friday.
Unlike its rivals, like Nvidia, which recently held the title of the most valuable company on the planet, Intel manufactures chips in addition to designing them, which gives it an edge over its rivals. Intel has also been working to set up a foundry to manufacture semiconductor chips in the US and compete with the likes of TSMC (Taiwan Semiconductor Manufacturing Company), which is the market leader in the chip manufacturing ecosystem.
