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UPDATE 8/1: Intel confirms it will cut 15,000 jobs. "Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate," says CEO Pat Gelsinger.
Original Story:
As Intel faces more competition than ever, the company reportedly plans to lay off thousands of employees.
According to Bloomberg, Intel is slashing jobs to cut costs and help engineer a rebound. The layoffs, which could be announced as soon as this week, will affect the company’s 110,000-employee workforce.
Intel declined to comment. But the chip giant might share more on Thursday when it reports second-quarter earnings. It previously cut 5% of its workforce in October 2022.
Intel is facing greater competition from AMD, Apple, and now Qualcomm on the PC chip front. At the same time, the company is fighting an uphill battle against Nvidia in selling enterprise chips to power generative AI workloads.
Intel's main challenge is that its chip-manufacturing processes have fallen behind Taiwan’s TSMC, which counts AMD, Apple, Nvidia, and Qualcomm as clients. Even some of Intel’s own chips, including the upcoming Lunar Lake CPUs for laptops, will use TSMC’s chip fabrication tech.
To help regain its competitive edge and grow its business, Intel CEO Pat Gelsinger is investing billions in R&D and building new chip manufacturing facilities. This includes establishing a foundry business to manufacture chips for third-party clients. In the interim, the company’s earnings have slumped on weak and stagnating demand for PCs, although it is seeing some growth.
That growth could extend with the help of Intel's new Lunar Lake chips, which promise to beat the competition in AI workloads and laptop power efficiency. The company plans to launch the processors on Sept. 3, Intel announced on Tuesday.
Still, the company is facing another controversy involving desktop processors, with some 13th and 14th Generation Core CPUs repeatedly crashing. Although a fix is planned for next month, Intel concedes the issue is severe enough to permanently damage affected processors. As a result, many PC builders have told their peers to avoid Intel’s desktop chips.