Intel stated that the company will sack more than 15% of its workforce to reduce costs. These comes after the US leading chip maker reported a loss of USD 1.6 billion in the recently ended quarter.
Intel chief executive Pat Gelsinger, in an earnings release, said, "Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones." "Second-half trends are more challenging than we previously expected," he added.
Company Issued an Statment
“Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate,” Gelsinger wrote.
According to Intel chief financial officer David Zinsner earnings in the second quarter were affected by "headwinds" to the ramp-up of Intel's artificial intelligence PC product and unused capacity at its facilities. "By implementing our spending reductions, we are taking proactive steps to improve our profits and strengthen our balance sheet," Zinsner said.
The company in 2023 reported having more than 124,800 working staff, that means the job cuts could hit around 18,000 employees.
In June 2024, Intel announced it was stopping the expansion of a major factory project in Israel, which was going to pump an extra $15 billion towards a chip plant.
The company said at the time that "managing large-scale projects, especially in our industry, often involves adapting to changing timelines." "Decisions are based on business conditions, market dynamics and responsible capital management," the US-based company added.
These came just a month after competition from rivals Nvidia, AMD and Qualcomm, unveiling technologies it said would lead the artificial intelligence revolution. For decades, Intel has dominated the market for the chips that run everything from laptops to data centres. But in recent years, its competitors -- especially Nvidia -- have soared ahead on specialised AI processors.