Thousands of jobs to go
Chipzilla plans to cut thousands of jobs to finance a recovery and cope with eroding market share.
Shares of the chipmaker, which is set to report quarterly results on Thursday, were up about a per cent in extended trading. The stock has slumped 40 per cent so far this year.
The US chipmaker remains a major player in the personal computer and server markets but has struggled to keep pace with the growing demand for chips used in AI applications.
CEO Pat [kicking] Gelsinger has initiated a turnaround to regain the company’s competitive edge, focusing on revitalising its manufacturing capabilities, investing in advanced chip technologies, and expanding into new markets.
In October 2022, Intel announced a cost-reduction plan that included “people actions”, aimed at slashing annual costs by $3 billion in 2023, reducing the chipmaker’s headcount to 124,800 at the end of 2023 from 131,900 a year earlier, according to regulatory filings.
The plan was expected to provide annual cost savings between $8 billion and $10 billion by 2025, the company had said in February last year.
Analysts expect the company’s second-quarter revenue to be about the same as a year earlier, with the data centre and AI segment set to post a 23 per cent decline, according to LSEG data.
Intel, traditionally known for designing and manufacturing its chips, has been making a concerted effort to expand into the foundry business, manufacturing chips for other companies.
Investors expect a push to promote chip manufacturing in North America by the Biden administration to diversify supply chains and reduce reliance on Taiwan to boost Intel’s prospects.
