Intel to reduce headcount by 15% by the end of 2024
Rumors were true, over 19K people will lose their jobs at Intel.
Intel has released its earnings report for the second quarter of 2024, revealing a loss of $1.6 billion, exceeding the previous quarter’s loss. The company has suspended dividend, which contributed to over 10% loss in Intel stock value after market closure. CEO Pat Gelsinger described the financial performance as “disappointing”, despite the company meeting its targets in process technologies.
Gelsinger noted that the second-quarter results were affected by “gross margin headwinds from the accelerated ramp of AI PC products.” This likely pertains to the Meteor Lake launch, which did not meet its original goals.
“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, and we are leveraging our new operating model to take decisive actions that will improve operating and capital efficiencies while accelerating our IDM 2.0 transformation. These actions, combined with the launch of Intel 18A next year to regain process technology leadership, will strengthen our position in the market, improve our profitability and create
shareholder value.”— said Pat Gelsinger, Intel CEO
Intel has been investing heavily in its foundry business, significantly impacting expenses. However, the company remains profitable in markets such as client computing and data centers.
Currently, Intel employs over 130,000 people. As part of efforts to reduce operating expenses, the company plans to cut its workforce by 15%, resulting in approximately 19,500 layoffs by the end of 2024.
The company will streamline its operations and meaningfully cut spending and headcount, reducing non-GAAP R&D and marketing, general and administrative (MG&A) to approximately $20 billion in 2024 and approximately $17.5 billion in 2025, with further reductions expected in 2026. Intel expects to reduce headcount by greater than 15% with the majority completed by the end of 2024 .
— Intel
Q2 2024 revenue,Source: Intel
Intel has confirmed that it has reached important milestones with its client and data-center products, including Panther Lake and Clearwater Forest, which will use the Intel 18A node. In the coming months, the company is expected to launch its Core Ultra 200 series, featuring Lunar Lake and Arrow Lake architecture. However, the earnings reports do not provide updates on the graphics business or the release timeline for the Arc Battlemage GPUs.
Source: Intel (PDF) via The Verge